As we await the decision of the U.S. Supreme Court in U.S. v. Windsor, which may come as early as this week, many employers are considering the potential impact that the decision may have on the health benefits that they provide to their employees, regardless of whether they currently offer health benefits to their employees’ same-sex spouses.

If the Court determines that the federal Defense of Marriage Act (“DOMA”) is unconstitutional, the definition of “marriage” and “spouse” for purposes of federal law will no longer exclude same-sex spouses.  Such a ruling would appear, on the one hand, to ease some of the burdens associated with administering health pans, and, on the other hand, add to the administrative burdens.

From the perspective of easing administrative burdens, such a ruling would allow employers to simplify some of their administrative procedures, because some existing processes otherwise applicable to opposite-sex spouses will now apply in the same way to same-sex spouses.  For example, if the federal law definition of “spouse” could include same-sex spouses, an employer will no longer need to require that employees pay for this coverage on an after-tax basis because employees would be allowed to pay for the coverage with pre-tax dollars through a cafeteria plan.  In addition, an employer will no longer be required to compute and impute for federal income tax purposes the value of same-sex spousal coverage provided by the employer.

However, DOMA’s repeal (should it happen) likely would also add to employers’ administrative burdens.  For example, employers may be required to allow employees to make immediate changes to their health coverage elections depending on the terms of the plan, particularly when employees may have declined spousal coverage in light of the federal tax consequences.  There will also be new COBRA and HIPAA obligations with respect to same-sex spouses.

Even employers that do not currently extend health benefits to employees’ same-sex spouses will have issues to consider if DOMA is repealed.  Depending on the terms of the employer’s health plan and the impact of the Court’s decision on applicable state law, employers may be required to offer this coverage.  It also may cause employers to reconsider whether to provide domestic partner health benefits to unmarried couples.

We expect that the Windsor decision will create many questions (some without definite answers) for employers with regard to health coverage provided to same-sex spouses and partners, and it will be important for employers to review the issues carefully with their advisors.