Since the Supreme Court’s decision regarding DOMA in June of 2013, information has been gradually released regarding the impact of that decision on employee benefits and taxes. On December 16th, 2013, the IRS issued guidance that specifically affects the participation of same-sex spouses in Flexible Spending Accounts (FSAs), Health Savings Accounts (HSAs), and cafeteria plans.
Here is a summary of some of the key points within the issued guidance:
- A cafeteria plan may allow a participant who who was married to a same-sex spouse as of the date of the Supreme Court’s decision (June 26, 2013) or who marries a same-sex spouse after that date to make a mid-year election change due to a change in legal marital status.
- An employer that receives notice before the end of the cafeteria plan year (including Dec. 16, 2013) that an employee participating in the cafeteria plan is married to the individual receiving health coverage must begin treating the amount that the employee pays for the spousal coverage as a pre-tax salary reduction under the plan.
- A cafeteria plan may permit a participant’s Flexible Spending Account (FSA) to reimburse covered expenses of the participant’s same-sex spouse (or the same-sex spouse’s dependent). This applies for health, dependent care, or adoption assistance FSAs.
- If the combined HSA contributions elected by two same-sex spouses exceed the HSA contribution limit for a married couple, contributions for one or both of the spouses may be reduced for the remaining portion of the tax year in order to avoid exceeding the applicable contribution limit.
I hope that you find this summary helpful as you seek to understand the impact on your business and your employees.
If you have any questions, please contact the CBG Benefits team at 877-332-6387.