The IRS has issued guidance (Notice 2015-86) for retirement plans and health and welfare plans following the Supreme Court’s approval of same-sex marriage nationwide in Obergefell, 2015-1 ustc ¶50,357. Obergefellrequires that a state must license a marriage between two people of the same sex and must recognize same sex marriages performed out of state.
Because same-sex marriages have been recognized for federal tax purposes since 2013 (Windsor, 2013-2 ustc ¶50,400), the IRS indicated that it does not expect any significant impact from Obergefellon the application of federal tax law to employee benefit plans. Nevertheless, the guidance is useful because it approves many actions already by plan sponsors, including the application of change-in-status rules under Code Sec. 125. It basically reaffirms and reinforces previous guidance released as Notice 2014-19 and Rev. Proc. 2013-17, along with Notice 2014-1.
Notice 2014-19 had required certain plan changes followingWindsor, such as recognizing a same-sex spouse as a spouse on and after June 26, 2013. A plan sponsor can make a retroactive amendment to recognize the spouse. A plan can also make certain optional changes or clarifications following the Obergefell decision, as long as the changes comply with qualification requirements under Code Sec. 401(a).
Health and Welfare Plans
Rev. Rul. 2013-17 and Rev. Rul. 2014-1 addressed the treatment of health and welfare benefits provided to a same-sex spouse.Obergefell does not require further changes, the IRS explained. However, the decision might require changes to plan operations where the plan offers benefits to the spouse of a participant.
For a cafeteria plan, if a health or welfare plan did not permit coverage of same-sex spouses, and plan terms change to permit this coverage, the plan may allow the participant to revoke an existing election regarding coverage, or may amend the cafeteria plan to allow an election.