The Effects of the Same-Sex Marriage Ruling on Taxes and Benefits

The Effects of the Same-Sex Marriage Ruling on Taxes and Benefits

The Supreme Court’s recent ruling on same-sex marriage could have many implications on taxes and benefits offered by employers. In short, this ruling will simplify the process of meeting the legal requirements for taxes and employee benefits. Under the new ruling, there is technically only one type of spouse. While many states already offered benefits to same-sex couples, the Supreme Court’s decision calls for big changes from states that did not previously recognize same-sex marriages. Implementing these changes could be costly. However, if an organization was already covering domestic partners, the process to cover same-sex couples should be a simple transition.

Although the ruling is clear, one gray area that remains in terms of benefits is the offering of employee benefits by self-insured companies. Self-insured companies assume their own risk for their employees and are not legally required to offer benefits to same-sex spouses. Due to this gray area, it is likely that most follow up litigation from this ruling will center around this topic. Employers must ensure that they remain informed about changes in regulation because denying benefits to same-sex spouses could leave them susceptible to discrimination lawsuits.

Another situation to consider is for organizations that previously offered benefits to unmarried same-sex partners prior to the ruling. If an organization already offered partner benefits to all couples, it is advantageous for them to continue to do so. If the benefit was specific to same-sex partners, then we may begin to see these benefits phased out, as the marriage is now legal and covered under the traditional spousal benefit plan.

One concern surrounding this ruling is that fewer employers will now offer spousal benefits in order to cut costs. Mercer, a consulting firm, surveyed 1,100 large employers and found that 5% of these companies did not offer spousal benefits or required an upcharge to receive them in 2014 as compared with 2012. Many are worried that this tendency will increase dramatically in the wake of the new ruling.  However, as organizations begin to understand how the ruling simplifies the benefit and tax processes, it should drive more participation in spousal benefit offerings, not less.

Regardless of the inevitable complications created by this new ruling, tax treatment and employee benefits will be much simpler overall for most employers. All spouses will now be treated equally for tax purposes and employee benefits will be equal for all spouses in the vast majority of cases. For more information, visit: or

This DATIS Blog was written by Adam Hawkins, DATIS, on July 29, 2015 and may not be re-posted without permission.

Written by Ally Edwards