Focus on New Laws: Same-Sex Marriage and Employee Benefits

Beginning on Aug. 1, same-sex married couples in Minnesota will be eligible to receive spousal benefits under both state and federal laws.
(Published Jul 22, 2013)

The same-sex marriage law takes effect in Minnesota on Aug. 1. This law recognizes same-sex civil marriages entered into on or after that date in Minnesota, as well as same-sex marriages validly entered into in other states. Minnesota joins 13 other states and Washington, D.C. in recognizing same-sex marriage.

On the national level, the U.S. Supreme Court in the case, United States v. Windsor, held on June 26 that Section 3 of the federal Defense of Marriage Act (DOMA) is unconstitutional. Section 3 defined “marriage” as “only a legal union between one man and one woman as husband and wife.” By striking down Section 3, same-sex marriages recognized under state law are also now recognized for federal law purposes.

Effect on Minnesota cities
The Minnesota same-sex marriage law works hand-in-hand with the Windsor decision. When same-sex marriage is recognized in Minnesota on Aug. 1, same-sex married Minnesotans will be eligible to receive spousal benefits under both state and federal laws. (Please note that the information provided here is general information. Federal and state agencies will provide additional guidance in the near future.)

Spousal benefits
Minnesota Statutes, section 471.61 authorizes cities to provide health and other benefits to city employees and their dependents. The statute defines “dependents” to include an employee’s “spouse and children under the age of 26 years.” With the Minnesota same-sex marriage law, “spouse” includes same-sex spouses married in Minnesota on or after Aug. 1, 2013, and those married legally elsewhere—regardless of when they were married. Therefore, if a city offers spousal benefits to opposite-sex spouses, it will also have to offer spousal benefits to same-sex spouses. On the other hand, if a city does not offer spousal benefits to its employees, that same city has no obligation to offer spousal benefits to same-sex spouses.

The law will also affect many other employee benefits, including pension funds, sick leave, medical spending and savings accounts, and COBRA benefits.

Tax treatment
After Windsor, same-sex spouses should be treated the same under Minnesota and federal tax laws. Beginning Aug. 1, same-sex married couples will be able to file as married individuals on both Minnesota and federal tax returns. The Minnesota Department of Revenue and U.S. Internal Revenue Service will be providing more guidance on this.

Domestic partners
Before the Minnesota same-sex marriage law, some cities enacted domestic-partner registry ordinances. City employees who may be registered as domestic partners are not automatically married; instead, they must be civilly married to be entitled to spousal benefits under state law.

Residency
Windsor does not resolve the treatment of a same-sex couple whose marriage is recognized in Minnesota but resides in a state that does not recognize same-sex marriage (such as Wisconsin, North Dakota, and South Dakota). The federal government will need to provide guidance on this situation.

Next steps
Despite the fact there are still some unanswered questions, Minnesota cities should consider:

  • Updating plan provisions inconsistent with the Minnesota same-sex marriage law and Windsor (such as changing any definition of “spouse” that references federal DOMA or requires opposite-sex status).
  • Reviewing employee handbooks.
  • Preparing and distributing appropriate employee communications.

The League has additional guidance for cities in the information memo, Same-Sex Marriage Laws: Effect on Minnesota Cities & Employee Benefits.

The League will continue to develop guidance on this subject as more information becomes available.

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