Obama's DOMA Decision Points to Yawning Gap in
Retirement Benefits for Same Sex Marriages
Friday, March 4, 2011 - NorthJersey.com
When the Obama administration announced that it no longer will defend the
Defense of Marriage Act (DOMA) in court, the news drew plenty of celebratory
praise from the LGBT community, and brickbats from conservatives.
The court battles over DOMA are far from over. But the administration's
decision points to the very dramatic gap in retirement benefits available to
straight and gay couples, and suggests that change could be on the way.
Many retirement benefits are geared to the earning histories we create during
our working lives. And married couples often can take advantage of policies that
allow lesser-earning spouses to tap the benefits of the higher-earning partner.
Now, the legalization of same-sex marriage in some states has raised a key issue
surrounding all retirement benefit programs that are sponsored by the federal
government, or that involve federal law or regulation.
DOMA defines the word "spouse" as applying only to opposite-sex married
couples for any purpose involving interpretation of federal law. A same-sex
couple that is married legally in the eyes of Massachusetts or Connecticut can't
access the spousal benefits of programs like Social Security or Medicare — a
restriction that can cost hundreds of thousands of dollars in lifetime
benefits.
LGBT advocates argue that's a clear violation of the equal protection clause
of the U.S. Constitution. They've been pressing their case in several lawsuits
that appear to have played an important role in prompting the Obama
administration's decision.
Two of the key cases were filed by Gay and Lesbian Advocates and Defenders
(GLAD), a New England-based legal advocacy organization. GLAD has filed lawsuits
on behalf of legally married same-sex couples in Massachusetts and Connecticut;
both cases are making their way through the courts.
The Massachusetts plaintiffs are seven married couples and three widowers
affected by federal marriage discrimination. A federal court judge ruled in the
plaintiffs' favor last summer, and the case is on appeal.
DOMA impacts several critical retirement benefits for same-sex couples.
For example, under Social Security's rules, when a spouse dies, the survivor
is entitled to receive the greater of his or her own benefit, or 100 percent of
the spouse's benefit — including any cost-of-living increases the spouse has
received along the way. But DOMA prevents the Social Security Administration
from recognizing those rights.
In the case of one of the Massachusetts plaintiffs, Herb Burtis, that means
forgoing about $700 in monthly benefits he could otherwise get by filing for the
survivor benefits of his late spouse, John Ferris. If Burtis lives to 90, the
lost increase in lifetime Social Security benefits from the time of John's death
would exceed $100,000.
Medicare is another big-ticket program where benefits are unequal.
Medicare eligibility is based on the number of quarters in which you have
paid payroll taxes into the system. At age 65, anyone with a work history of at
least 40 quarters can enroll for Medicare Part A (hospitalization) without
paying a premium. Everyone pays a premium for Part B (doctors' visits), Part D
(prescription drugs) or a supplemental medical policy. But access to the entire
program is predicated on Part A enrollment.
The provisions of DOMA dictate that a legally married LGBT spouse with less
than 40 quarters of work cannot qualify for spousal benefits and must take the
other route into Medicare — buying into the system by paying a hefty Part A
premium out of pocket. This year, the monthly Part A premium is $248 for
beneficiaries with 30 to 39 quarters of work history, and $450 for those with
less than 30 quarters in the system.
The constitutional issues stemming from DOMA also extend to private-sector
pensions, which are governed by the federal Employee Retirement Income Security
Act of 1974 (ERISA).
That law requires companies sponsoring traditional defined-benefit pension
plans to offer workers a survivor option.
This option allows a spouse to continue collecting annuity payments after the
primary beneficiary's death; typically, the employee accepts a lower monthly
payment in return for the spousal protection. Although ERISA doesn't contain a
clear definition of what constitutes a spouse, DOMA's definition governs — and
that means same-sex plan participants can't opt for a survivor benefit unless
the plan sponsor has set up something specifically for that purpose.
Mark Miller is a columnist for Tribune Media Services. His column appears on
Fridays.
When the Obama administration announced that it no longer will defend the
Defense of Marriage Act (DOMA) in court, the news drew plenty of celebratory
praise from the LGBT community, and brickbats from conservatives.
The court battles over DOMA are far from over. But the administration's
decision points to the very dramatic gap in retirement benefits available to
straight and gay couples, and suggests that change could be on the way.
Many retirement benefits are geared to the earning histories we create during
our working lives. And married couples often can take advantage of policies that
allow lesser-earning spouses to tap the benefits of the higher-earning partner.
Now, the legalization of same-sex marriage in some states has raised a key issue
surrounding all retirement benefit programs that are sponsored by the federal
government, or that involve federal law or regulation.
DOMA defines the word "spouse" as applying only to opposite-sex married
couples for any purpose involving interpretation of federal law. A same-sex
couple that is married legally in the eyes of Massachusetts or Connecticut can't
access the spousal benefits of programs like Social Security or Medicare — a
restriction that can cost hundreds of thousands of dollars in lifetime
benefits.
LGBT advocates argue that's a clear violation of the equal protection clause
of the U.S. Constitution. They've been pressing their case in several lawsuits
that appear to have played an important role in prompting the Obama
administration's decision.
Two of the key cases were filed by Gay and Lesbian Advocates and Defenders
(GLAD), a New England-based legal advocacy organization. GLAD has filed lawsuits
on behalf of legally married same-sex couples in Massachusetts and Connecticut;
both cases are making their way through the courts.
The Massachusetts plaintiffs are seven married couples and three widowers
affected by federal marriage discrimination. A federal court judge ruled in the
plaintiffs' favor last summer, and the case is on appeal.
DOMA impacts several critical retirement benefits for same-sex couples.
For example, under Social Security's rules, when a spouse dies, the survivor
is entitled to receive the greater of his or her own benefit, or 100 percent of
the spouse's benefit — including any cost-of-living increases the spouse has
received along the way. But DOMA prevents the Social Security Administration
from recognizing those rights.
In the case of one of the Massachusetts plaintiffs, Herb Burtis, that means
forgoing about $700 in monthly benefits he could otherwise get by filing for the
survivor benefits of his late spouse, John Ferris. If Burtis lives to 90, the
lost increase in lifetime Social Security benefits from the time of John's death
would exceed $100,000.
Medicare is another big-ticket program where benefits are unequal.
Medicare eligibility is based on the number of quarters in which you have
paid payroll taxes into the system. At age 65, anyone with a work history of at
least 40 quarters can enroll for Medicare Part A (hospitalization) without
paying a premium. Everyone pays a premium for Part B (doctors' visits), Part D
(prescription drugs) or a supplemental medical policy. But access to the entire
program is predicated on Part A enrollment.
The provisions of DOMA dictate that a legally married LGBT spouse with less
than 40 quarters of work cannot qualify for spousal benefits and must take the
other route into Medicare — buying into the system by paying a hefty Part A
premium out of pocket. This year, the monthly Part A premium is $248 for
beneficiaries with 30 to 39 quarters of work history, and $450 for those with
less than 30 quarters in the system.
The constitutional issues stemming from DOMA also extend to private-sector
pensions, which are governed by the federal Employee Retirement Income Security
Act of 1974 (ERISA).
That law requires companies sponsoring traditional defined-benefit pension
plans to offer workers a survivor option.
This option allows a spouse to continue collecting annuity payments after the
primary beneficiary's death; typically, the employee accepts a lower monthly
payment in return for the spousal protection. Although ERISA doesn't contain a
clear definition of what constitutes a spouse, DOMA's definition governs — and
that means same-sex plan participants can't opt for a survivor benefit unless
the plan sponsor has set up something specifically for that purpose.
Mark Miller is a columnist for Tribune Media Services. His column appears on
Fridays.