IRS recognizes same-sex marriages, HHS outlines employer appeals under ACA, and DOL cracks down on nursing break violations: 3 things you need to know this week

IRS applies universal tax treatment to same-sex marriages

As expected, the Internal Revenue Service recently announced that in response to the Supreme Court’s Defense of Marriage Act decision, it would recognize same-sex marriages for federal income-tax purposes. So, as far as Uncle Sam’s tax collectors are concerned, any tax filer who is married (regardless of their spouse’s gender) can legally file as such on their yearly tax return—regardless of whether the state they live in recognizes same-sex marriage.

What comes as a bit of a surprise to Treasury watchers, though, is that the IRS ruling is so broad that it recognizes couples who were married not only in the 14 U.S. states where same-sex unions are legal, but also U.S. territories and foreign countries. Further, same-sex married couples can claim refunds as far back as tax year 2010, and can treat the amounts paid for same-sex spouse health insurance as pretax and excludable from income.

HHS outlines appeals process to fight ACA’s affordable coverage and minimum value penalties

As with most things concerning the Affordable Care Act—particularly compliance, implementation and communication—this week’s announcement from the Health and Human Services Department detailing how employers can appeal an employee being accepted by an insurance exchange is more than a little complicated.

However, it’s important that employers be aware of their appellate rights, since having a benefits-eligible employee successfully claim a subsidy to buy coverage from an exchange means an employer’s coverage misses ACA’s thresholds regarding affordability, minimum value or both. Violating either standard carries a penalty of up to $3,000 per employee per year.

So, complex as it is, here’s what employers need to know:

• When an employee has been determined eligible a subsidy, the exchange will notify his or her employer, explaining the facts surrounding that determination.
• If an employer does not agree with the exchange’s decision, it may not appeal to HHS.
• However, states can establish their own appeals process for employers, making appeals especially complicated for employers operating in multiple states. For states that don’t operate their own exchange or opt not to create an independent appeals process, HHS will establish one for them.
• To prepare an appeal, employers may see the information used to determine its coverage does not meet affordability or minimum value standard. However, ACA prohibits using an employee’s tax return in the employer appeals process.
• Appeals will be given a de novo review—in other words, appeals will be reviewed anew, not automatically defer to the exchange’s decision.
• If an employee loses his/her subsidy due to a successful employer appeal, the employer can—but isn’t required to—offer a special enrollment period for him/her to enroll in the employer’s medical plan.

This week’s hidden gem: Don’t let disputes over milk get you into hot water

We have but one request: If the Department of Labor ever comes knocking at your door for noncompliance with an employment law, please don’t let the reason have anything to do with denying space or breaks to nursing mothers.

As employers know, the Affordable Care Act almost universally requires companies to provide adequate, private space and “reasonable” unpaid break time for mothers to express breast milk. If ever there was a feel-good, win-you-brownie-points kind of compliance measure, this is it.

Still, as the legal experts at Fisher & Phillips LLP point out, a fair number employers don’t seem out to get brownie points—rather, the firm finds, DOL’s 54 investigations have turned up one or more violations of the break requirement in two-thirds of those employers, with about 80% of those related to failure to provide adequate space. In addition, there have been employee lawsuits, including one where a court allowed a former employee to move forward with her allegation that management retaliated against her when she asserted her rights.