The American Benefits Council has urged federal regulators to update employers on benefit plan changes they must make in light of the U.S. Supreme Court's partial overturning of the Defense of Marriage Act.

In a letter sent Wednesday to the Internal Revenue Service and the Treasury, Labor, and Health and Human Services departments, the Washington-based advocacy group said employers are waiting for critical guidance from regulators on the extent to which their benefit plans must now expand to include same-sex spouses.

In its ruling, the Supreme Court on a 5-4 vote declared unconstitutional Section 3 of DOMA, which defined marriage strictly as the union between a man and a woman for all federal purposes.

Absent the provisions of Section 3, the federal government's recognition of a valid marriage when determining eligibility for tax credits and other employment-related benefits — such as continuing health care coverage for workers and their families under COBRA and guaranteed leave for family and medical emergencies under the Family and Medical Leave Act — will default to the relevant state's marriage laws.

Since the high court issued its historic decision in late June, only the U.S. Office of Personnel Management has spelled out how it will determine which state's law will control an employer's obligation to extend benefits to gay and lesbian married couples.

Earlier this month, OPM officials announced that all federal employees and their nondependent spouses will be eligible for marriage benefits regardless of their state of residence as long as they possess a valid marriage license.

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Ruling takes effect Monday

With the high court's decision on Section 3 due to take effect Monday, ABC leaders said it is particularly imperative that the IRS and other regulators issue similar guidance outlining which state's marriage laws will dictate private employers' coverage obligations, and under what circumstances.

“Without guidance on this first question, plans and employers will be left in an untenable situation in administering benefits,” the ABC's letter said. “This is because if the employer or plan used the incorrect definition, the plan or employer could find itself having to readminister benefits at material costs to the plan or employer, or face penalties or increased litigation risk for failing to comply with applicable federal law.”

The lack of guidance from federal regulators since the Supreme Court's decision is of particular concern for employers with active or retired employees in multiple states, the ABC said in the letter.

Thirteen states and the District of Columbia have legalized same-sex marriage, while 32 states prohibit it. New Mexico and New Jersey have not passed laws expressly authorizing or banning same-sex marriages.

Further complicating matters are DOMA's Section 2 provisions, which were not challenged in the case before the Supreme Court and will continue to permit states that oppose legalization of same-sex marriages to refuse recognition of valid marriages performed in other states.

The ABC said it supports an approach similar to that taken by OPM, in which a uniform “state of celebration” rule would recognize any marriage validated by a state or foreign country.

“A uniform rule is necessary to ensure that the ongoing sponsorship and maintenance of employee benefit plans is not unduly complex or costly, therefore allowing American workers and their spouses broad access to a full range of benefits,” the ABC's letter said.

Potentially the largest source of additional benefit costs for employer plan sponsors will be the extent to which same-sex spouses' eligibility for benefits will be applied retroactively. In its letter, ABC leaders urged regulators to leave retroactive eligibility for health benefits at employers' discretion.

“Requiring (as opposed to permitting) employers to provide retroactive coverage consistent with Windsor would likely create significant administrative problems and unanticipated expense for many employers,” the letter said.

Federal agencies also must decide how much time employers will be given to review the design of their benefit plans and communication strategies for potential conflicts and make any changes necessary to bring their plans into compliance, the ABC's letter said.

While federal regulators evaluated the Supreme Court ruling, lawmakers are seeking to simplify the issue of interstate recognition of legal same-sex marriages. Within hours of the high court's ruling, identical bills were introduced in the U.S. Senate and House of Representatives to repeal the law in its entirety.

The bills, sponsored by Rep. Jerrold Nadler, D-N.Y., and Sen. Dianne Feinstein, D-Calif., would require the federal government to recognize any legally sanctioned marriage performed in the U.S. or its territories, regardless of the couple's state of residence.

The bills were referred to committee for review.