U.S. Supreme Court Legalizes Same-sex Marriage Nationwide

QUICK FACTS
  • On June 26, 2015, the Supreme Court issued its ruling on same-sex marriage.
  • The ruling affects same-sex marriage laws across the country.
  • The Supreme Court ruled that same-sex couples have a constitutional right to marry and to have their marriages recognized as valid, no matter where they live in the United States.

The Supreme Court’s ruling means that same-sex couples have a constitutional right to marry in the United States, regardless of which state they live in.

marriage-equalityOn June 26, 2015, the U.S. Supreme Court issued its much-anticipated decision on same-sex marriage. In a landmark decision, the Supreme Court ruled 5-4 that the U.S. Constitution guarantees same-sex couples the right to marry.

This case, Obergefell v. Hodges, involved challenges to same-sex marriage bans from four states—Ohio, Tennessee, Michigan and Kentucky. Even though the Supreme Court’s decision involves these four states, the ruling affects same-sex marriage laws in every state.

The Supreme Court’s ruling means that same-sex couples have the right to be married in their own states and to have their marriages recognized as valid in every other state.
The Supreme Court’s ruling is effective immediately, which means all states must start (or continue) issuing marriage licenses to same-sex couples on the same terms as opposite-sex couples.

Legal Debate on Same-sex Marriage
Up until two years ago, the federal Defense of Marriage Act (DOMA) banned federal recognition of same-sex marriages by solely defining “marriage” as the legal union between one man and one woman as husband and wife.

On June 26, 2013, the U.S. Supreme Court struck down a key part of DOMA, ruling that the law’s definition of “marriage” violated the U.S. Constitution. As a result of the Supreme Court’s DOMA ruling, legally married same-sex couples are entitled to the same benefits and protections under federal law as opposite-sex married couples.

At the time of the Supreme Court’s DOMA ruling, the majority of states had laws that prohibited same-sex couples from getting married. Most states also refused to recognize same-sex marriages that were legally entered into in other jurisdictions.

Due to the Supreme Court’s DOMA ruling, numerous lawsuits were filed across the country to challenge the constitutionality of state bans on same-sex marriage. Courts reviewing these challenges overwhelmingly ruled that the state bans on same-sex marriage were unconstitutional.

As of the Supreme Court’s ruling, same-sex marriage was legal in 37 states and the District of Columbia. In the majority of these states (Florida, Wisconsin, Kansas and Virginia, for example) same-sex marriage was legalized by a court decision following the Supreme Court’s DOMA ruling.

On Nov. 6, 2014, the 6th Circuit Court of Appeals upheld state bans on same-sex marriage in Michigan, Ohio, Tennessee and Kentucky. The 6th Circuit ruled that the same-sex marriage issue should be decided in each state through the regular political process and not through the court system. The 6th Circuit’s decision conflicted with the decisions from other federal appeals courts, and the Supreme Court stepped in to resolve this conflict.

Supreme Court Decision
The Supreme Court was asked to rule on two specific issues—the power of the states to ban same-sex marriages and the power of the states to refuse to recognize same-sex marriages performed in other states.

The Supreme Court held that marriage is a fundamental right under the Constitution for both opposite-sex and same-sex couples. Thus, the Supreme Court ruled that every state must allow marriages between two people of the same sex and must also recognize a marriage between two people of the same sex when their marriage was lawfully licensed and performed out-of-state.

The Supreme Court noted that the institution of marriage has evolved over time in response to developments in law and society. The Supreme Court outlined four legal principles that supported its ruling that marriage is a fundamental right for both same-sex and opposite-sex couples. These legal principles are as follows:

  •  The right to personal choice regarding marriage is inherent in the concept of individual autonomy;
  • The right to marry supports a two-person union unlike any other in its importance to the committed individuals;
  • Marriage safeguards children and families; and
  • Marriage is a keystone to our social order.

Impact of Supreme Court Decision
The Supreme Court’s decision impacts the legality of same-sex marriages throughout the country.

By ruling that state laws prohibiting same-sex marriage are unconstitutional, the Supreme Court has effectively legalized same-sex marriage in all 50 states. Same-sex couples will be allowed to marry in any state, and will be entitled to all the rights, benefits and obligations given to opposite-sex spouses under both federal and state law.

Also, due to the Supreme Court’s ruling, employers will generally be required to treat employees in same-sex marriages the same as employees in opposite-sex marriages for many federal and state law purposes.

Many federal laws have already been interpreted to include both same-sex and opposite-sex marriages due to the Supreme Court’s decision on DOMA. The Supreme Court’s most recent ruling will expand these legal rights and protections to additional couples.

Also, many state law leave rights for legally married spouses should extend to employees with same-sex spouses. Same-sex married couples should also be subject to the same state tax rules as opposite-sex married couples. State insurance laws may require employers with insured health plans to offer equal health plan coverage to opposite-sex and same-sex couples.

The Supreme Court did not consider whether federal nondiscrimination laws should be expanded to protect workers from discrimination based on sexual orientation or gender identity. However, a number of states have laws that prohibit such workplace discrimination. Employers should keep any applicable laws in mind when providing any rights or benefits to employees.

More Information
Stay tuned to www.morrisandreynolds.com for the latest news affecting your insurance needs, and stay in close contact to your professional agents and underwriters here at Morris & Reynolds Insurance. We will do our very best to guide you in the right direction, keep you informed and assist you for many years to come.

U.S. Supreme Court Upholds ACA Subsidies in Federal Exchanges

QUICK FACTS
  • On June 25, 2015, the U.S. Supreme Court issued a final ruling in King v. Burwell.
  • The Supreme Court upheld the availability of subsidies in all states, including those that have federally facilitated Exchanges.
  • The Court reasoned that Congress intended subsidies to be available in all states when drafting the ACA.
  • As a result, eligible individuals in all states may continue to receive subsidies.

“On June 25, 2015, the U.S. Supreme Court ruled that ACA subsidies are available in all states, including those with federal Exchanges.”

On June 25, 2015, the U.S. Supreme Court issued a final ruling in King v. Burwell. This case challenged the availability of health insurance Exchange subsidies in states with Exchanges run by the federal government.

In a 6-3 decision, the Court held that, in drafting the Affordable Care Act (ACA), Congress intended for the federal government to provide subsidies in all states—those that established their own Exchanges and those that have federally facilitated Exchanges, or FFEs.

According to the Supreme Court, without the availability of these subsidies in all states, several other key ACA provisions would not operate as intended (including the individual mandate and the employer shared responsibility rules). The Court’s ruling means that subsidies are available in all states, including those with FFEs.

Health Insurance Exchanges and Subsidies
The ACA requires each state to have an Exchange for individuals and small businesses to purchase private health insurance. The ACA delegated primary responsibility for establishing the Exchanges to each individual state. However, the Department of Health and Human Services (HHS) operates an FFE in any state that refuses or is unable to set up an Exchange. For 2015, only 13 states and the District of Columbia established their own Exchanges. HHS operates FFEs in the remaining states (with state assistance in some cases—but in most cases, with no state assistance).

The ACA also created health insurance subsidies to help eligible individuals and families purchase coverage through an Exchange. The subsidies are designed to make Exchange coverage more affordable by reducing out-of-pocket health care costs.

Of the approximately 11 million people who selected private health plans during the 2015 open enrollment period, nearly 9 million obtained coverage through an FFE. According to HHS, 87 percent of Exchange consumers have been determined to be eligible for subsidized insurance.

Overview of King v. Burwell
King v. Burwell is one of several lawsuits that were filed in response to an IRS rule authorizing subsidies in all states, including those with FFEs. These cases challenged the ability of the federal government to provide subsidies to individuals in states with FFEs.

This case was filed by four individuals who live in a state with an FFE. They argued that the IRS rule authorizing subsidies in all states conflicts with the text of the ACA. They asserted that, according to the law’s plain language, the ACA only authorized subsidies to be provided in states that have established their own Exchanges.

Although the Supreme Court agreed that text of the ACA is ambiguous, it noted that the ACA’s subsidy provision must be read in a manner “that is compatible with the rest of the law.”

If subsidies were not available in federal Exchanges, the Supreme Court concluded that “it would destabilize the individual insurance market in any State with a Federal Exchange, and likely create the very ‘death spirals’ that Congress designed the Act to avoid.” Also, if the federal government was unable to provide subsidies in states that have FFEs, the Court asserted that several other key ACA provisions would not operate as intended.

For example, the individual mandate “would not apply in a meaningful way, because so many individuals would be exempt from the requirement without the tax credits.” In addition, because the employer shared responsibility penalties are triggered only when an employee receives a premium tax credit, those penalties would not apply in any states where the subsidies were unavailable.

Therefore, according to the Supreme Court, it “stands to reason that Congress meant for those [subsidies] to apply in every state.”

A number of similar lawsuits are still pending in federal courts. These courts are required to follow the Supreme Court’s ruling when issuing their decisions. Therefore, it is expected that the decisions in other cases will be consistent with the Supreme Court’s ruling.

Impact on Employers
While the case was pending, the Obama Administration continued to make federal subsidies available to eligible individuals in all states, including those with FFEs.

On Nov. 7, 2014, the White House posted a statement, mirroring an earlier IRS statement, to confirm that nothing changed for individuals receiving advance payments of the premium tax credit and that tax credits remained available.

Because the Supreme Court ruled that ACA subsidies are available in all states, including those with FFEs, eligible individuals in all states may continue to receive subsidies for their Exchange coverage.

A ruling that struck down the availability of subsidies in FFEs would have had significant implications for employers as a result of the ACA’s employer mandate. Under the employer mandate, certain large employers may face penalties if they do not offer coverage to their full-time employees that meets certain requirements. These penalties apply only if an employee receives a subsidy to buy coverage through an Exchange.

If the subsidies were available only in state-based Exchanges, employers would not be subject to penalties for employees living in states with an FFE. However, because the subsidies remain available in all states, the employer shared responsibility penalties will still apply for employers in all states.

More Information
Please contact Morris & Reynolds Insurance at 305.238.1000, for more information on the ACA’s federal subsidies and the employer mandate or visit our website’s Health Reform page.

Supreme Court Rules on Abercrombie Religious Discrimination Case

QUICK FACTS
  • Federal law protects job applicants from discrimination based on religion.
  • Employers may not refuse to hire someone to avoid accommodating a religious practice.
  • An employer is not required to have actual knowledge of the need for an accommodation to be in violation of federal discrimination laws.

An employer may not make an applicant’s religious practice—confirmed or otherwise—a factor in employment decisions.

On June 1, 2015, the U.S. Supreme Court ruled against retailer Abercrombie & Fitch in a high-profile religious discrimination case. In Equal Employment Opportunity Commission (EEOC) vs. Abercrombie & Fitch Stores, Inc. (Abercrombie), the Court sided with a Muslim woman who had been denied a job due to wearing a headscarf.

The Court held that, to prove a violation of federal law, an applicant must only show that the need for a religious accommodation was a motivating factor in the employer’s decision. Whether the employer had actual knowledge of the need for an accommodation is irrelevant. An employer may not make an applicant’s religious practice—confirmed or otherwise—a factor in employment decisions.

Background
Samantha Elauf, a practicing Muslim woman, applied for employment at one of Abercrombie’s stores. Using Abercrombie’s ordinary assessment system, an assistant store manager determined that Elauf was eligible for hire.

Having noticed that Elauf wore a headscarf (hijab), the assistant manager sought clarification from the store and district managers on whether use of a headscarf conflicted with Abercrombie’s policy against wearing “caps.” The assistant manager informed her superiors that she believed Elauf wore the headscarf because of her faith. Abercrombie’s district manager instructed the assistant manager to not hire Elauf because wearing the headscarf would violate Abercrombie’s “look policy” as would all other headwear.

The EEOC sued Abercrombie on Elauf’s behalf, claiming that Abercrombie violated Title VII of the Civil Rights Act. The lower court awarded Elauf $20,000 in damages, but the Court of Appeals reversed the award after concluding that an employer cannot be liable for failing to accommodate a religious practice until the applicant actually informs the employer of the need for an accommodation.

Title VII Discrimination
Title VII prohibits prospective employers from discriminating against applicants to avoid providing accommodations that the employer could implement without undue hardship. Specifically, an employer cannot:

  • Discriminate against an employee or job applicant, with respect to compensation, terms, conditions or privileges of employment, because of the individual’s race, color, religion, sex or national origin; or
  • Limit, segregate or classify an employee or job applicant in any way that would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect the employee’s status, because of the employee’s race, color, religion, sex or national origin.

Discrimination includes failing or refusing to hire a job applicant because of the reasons mentioned above.

The Supreme Court’s Decision
The question presented to the Supreme Court was whether the prohibition on discrimination applies only when an applicant has informed the employer of the need for an accommodation.

The Court disagreed with the Court of Appeals, stating that a job applicant does not need to prove that the employer had actual knowledge of a need for religious accommodation. Rather, a job applicant can prove a discrimination case if he or she can show that the need for accommodation was a motivating factor in the employer’s decision.

The Court noted that knowledge and motive are two separate concepts, and, that for a Title VII analysis, an employer’s motives regarding hiring practices are more relevant in determining whether discrimination has taken place. The Court reasoned that receiving a request of accommodation or having actual knowledge of a religious practice would make it easier to infer a motive, but that this knowledge is not a necessary condition to establish discrimination. To illustrate, the Court offered the following example:

“Suppose that an employer thinks (though he does not know for certain) that a job applicant may be an orthodox Jew who will observe the Sabbath, and thus be unable to work on Saturdays. If the applicant actually requires an accommodation of that religious practice, and the employer’s desire to avoid the prospective accommodation is a motivating factor in his decision, the employer violates Title VII.”

The Court also rejected Abercrombie’s argument that its hiring practices were permissible because the policy against headgear was neutral and treated all employees wearing it for secular and religious reasons the same. The Court stated that religious practices must be accommodated and failing to do so will not be acceptable because the failure is due to an otherwise-neutral policy.

The Court reversed the ruling of the 10th Circuit and remanded the case for further review consistent with this opinion.

Impact on Employers
In general, the Court’s Abercrombie decision confirms current practice for many employers. Abercrombie has changed the policy that led to the case and now allows for headgear, including headscarves.

However, the ruling is significant for employers because it establishes a lower standard for job applicants to prove discrimination—motive instead of actual knowledge. In practical terms, this means that an employers should not base their hiring decisions on an assumption that an applicant may require some type of accommodation.

Employers should also consider whether they can accommodate job applicants’ requests without any undue hardship. Religious observances and practices do not have to be accommodated if an employer can demonstrate that it is unable to reasonably accommodate the observance or practice without undue hardship on the conduct of the business.

More Information
Stay tuned to www.morrisandreynolds.com for the latest news affecting your insurance needs, and stay in close contact to your professional agents and underwriters here at Morris & Reynolds Insurance. We will do our very best to guide you in the right direction, keep you informed and assist you for many years to come.