The impact of United States v. Windsor, No. 12-307 (U.S. June 26, 2013), a case we reported on in an earlier post is far reaching and left many unanswered questions about same-sex spousal benefits. The IRS recently responded to some of these questions by issuing Revenue Ruling 2013-17 and addressed how this change would affect the numerous special protections and opportunities available to a spouse under retirement and welfare benefit programs.
This alert explains that a number of plan requirements previously inapplicable to a same-sex spouse may now be available to that same-sex spouse, including, but not limited to:
- The application of retirement plan spousal consent requirements to a same-sex spouse
- The extension of retirement plan qualified joint and survivor annuities to a same-sex spouse
- The availability of retirement plan spousal rollover rights to a same-sex spouse
- The ability of a same-sex spouse to obtain a right to a retirement plan or medical plan benefit through a qualified domestic relations order or qualified medical support order
- The application of the more favorable spousal minimum-required distribution rules to a same-sex spouse eligible for a retirement plan benefit
- The extension of the right to receive benefits for a same-sex spouse on a pretax basis (previously, income was imputed to the employee for the portion of the benefit attributable to a same-sex spouse)
- The broadening of the welfare plan change-in-status rules to include events involving a same-sex spouse
The alert also explains that these changes may require amending plan documents to reflect the new definition of “spouse” under the Internal Revenue Code and updating insurance contracts, summary plan descriptions, benefit forms, and numerous other plan communications that previously provided for different treatment of a same-sex spouse based upon the pre-Windsor IRS definition of “spouse.”
There are also important tax implications that are summarized in the alert that may impact manufacturers.