February 27, 2013

For additional information:
Jason Hammersla
office 202-289-6700
cell 202-422-4652 (cell)

Council joins Supreme Court amicus brief:

Defense of Marriage Act imposes burdens on employer benefit plan sponsors, unequal treatment of lawfully married employees

WASHINGTON, DCThe American Benefits Council today joined 277 employers, organizations and municipalities in filing an amicus (friend-of-the-court) brief with the U.S. Supreme Court in the case of United States v. Windsor. The brief highlights the disparate tax treatment the federal Defense of Marriage Act (DOMA) imposes on workers covered by employer-sponsored health and retirement plans, and the financial, administrative and other burdens the law places on employers providing those benefits.

"We want the Supreme Court to understand the unequal tax treatment that DOMA applies to employees who are legally married in states recognizing same-sex marriages and the burdens it imposes on employer sponsors of health and retirement benefits," said Council President James A. Klein. The Council, whose members sponsor directly or administer health and retirement benefits covering more than 100 million Americans, is the only national employee benefits business association to join the amicus brief.

The brief's argument centers on how DOMA "requires that employers treat one employee differently from another, when each is married, and each marriage is equally lawful." This disparate treatment creates challenges for both employees and companies sponsoring benefit plans, such as:

  • Federal income tax imposed (and the corresponding withholding required) on the value of health benefits for spousal coverage, applicable only to coverage of same-sex spouses (pages 15-16 of the brief);

  • Differing eligibility for participation and utilization of pre-tax "cafeteria" plans (16-17);

  • Differing eligibility for pre-retirement hardship distributions from retirement plans (20-21);

  • Disqualification of same-sex spouses from the estate tax marital deduction on proceeds from employer-sponsored life insurance (21-22);

  • Differing eligibility for receiving spousal pension benefits in the form of a qualified joint and survivor annuity (22-23);

  • Administration of dual systems of benefits and payroll — related to federal tax withholding, payroll taxes and workplace benefits that turn on marital status — imposing additional costs and tax burdens on employers (25-26); and

  • Requiring employers to determine how DOMA corresponds with state non-discrimination laws (31-32).

"Companies that offer benefits to their employees' same-sex spouses do not want those families to face unequal treatment under the law. And employers want to commit their resources to core business goals and the workforce that makes achieving those goals possible. For many employers and workers, DOMA is an unnecessary and troublesome obstacle," Klein said.

For more information on the Council's position on DOMA, or to arrange an interview with Council policy staff, please contact Jason Hammersla, Council director of communications, at or by phone at 202-289-6700 (office) or (202) 253-5458 (cell).

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The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council's members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.