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On September 15, 2009, a bill was introduced in the U.S. House of Representatives that would repeal the federal Defense of Marriage Act (DOMA).

The federal DOMA was enacted in 1996 and provides that for all purposes of federal law, such as ERISA and the federal tax code, the word “marriage” means “only a legal union between one man and one woman as husband and wife” and the word “spouse” refers “only to a person of the opposite sex who is a husband or wife.” In addition, the DOMA provides that no state will be required to recognize a same-sex relationship that is considered a legal marriage in another state.

The proposed bill (H.R. 3567), titled the “Respect for Marriage Act,” requires that all marriages that are valid under state laws are also valid and recognized under federal law. States that have not legalized same-sex marriage would not be required to recognize same-sex marriages performed elsewhere, but same-sex marriage performed in a state where same-sex marriage has been legalized would be recognized for all purposes of federal law.

Same-sex marriage is now legal in Massachusetts, Connecticut, Iowa and Vermont. California recognizes same-sex marriages performed in the state between June 17 and November 4, 2008. Same-sex marriage becomes legal in New Hampshire on January 1, 2010. New York and the District of Columbia recognize same-sex marriages lawfully performed elsewhere.

Employers should take note, because, if enacted, the bill would significantly change the federally mandated benefits available to employees and their same-sex spouses. For example, employers with pension or 401(k) plans would be required to recognize same-sex spouses for purposes of determining the surviving spouse annuities or other death benefits under these retirement plans. The federal income tax treatment of health coverage for an employee's same-sex spouse would change such that employees would no longer have to be taxed on the income imputed for the employer's contribution to the same-sex spouse's coverage. Employers also would be required to permit employees to take family and medical leave to care for the illness of a same-sex spouse.

Although it is too early to predict whether this bill will become law, the legislation, along with several challenges in the courts, signifies a trend toward growing opposition to the federal DOMA.

For more information, in the Tax Management Portfolios, see Finston and Jewett, 351 T.M., Plan Qualification -- Pension and Profit Sharing Plans, and in Tax Practice Series, see ¶5510, Qualified Retirement Plans -- Overview.