This is the second part of a two-part article dealing with the impact of Windsor on taxation and public benefits. This article will examine the impact of Windsor on public benefits planning.
In United States v. Windsor,[1] the United States Supreme Court declared §3 of the Defense of Marriage Act (DOMA) unconstitutional. This section limited marriage to a union between one man and one woman. Windsor did not apply to §2 of DOMA, which permits states to refuse to recognize the actions of another state on the issue of same-sex marriage. Therefore, a couple married in New Jersey would have a valid marriage because the marriage was celebrated in a state that recognizes same-sex marriages. However, if that same couple then moved to Pennsylvania, §2 of DOMA permits Pennsylvania to refuse to recognize the valid marriage celebrated in New Jersey.
Medicaid is a joint federal/state program. Funding comes partly from the federal government and partly from the state government. Therefore, state law in the state of domicile must be considered.
Under the CMS guidance, CMS takes the position that to apply for Medicaid benefits the marriage must have been celebrated in a state that recognizes same-sex marriages and the couple must be domiciled in a state that recognizes same-sex marriages. Suppose a same-sex couple is married in New Jersey and later applies for Medicaid in New Jersey. Since New Jersey is the state of celebration and domicile, Medicaid should recognize the marriage. This means that the assets of the community spouse would be deemed to the institutional spouse, and the community spouse would be entitled to keep the Community Spouse Resource Allowance, which is one-half of the couple’s combined countable assets with a maximum of $117,240 for 2014.[10]
The community spouse would also be entitled to the Minimum Monthly Maintenance Needs Allowance (MMMNA), which until June 30, 2014, is $1,938.75,[11] and which will increase to $1,966.25 for the period July 1, 2014 until June 30, 2015.[12]
CHART
THE EFFECT OF WINDSOR ON TAXATION AND
PUBLIC BENEFIT PROGRAMS
Category |
Marriage Recognized State of Celebration |
Marriage Recognized State of Domicile |
Civil Unions and Domestic Partnerships |
Income Tax |
R |
NR |
No |
Estate Tax |
R |
NR |
No |
Gift Tax |
R |
NR |
No |
SSI |
R |
R |
No |
SSDI |
R |
R |
No |
SSDI/Spousal Survival Benefits |
R |
R |
No |
SSDI/Lump Sum Death Benefit |
R |
R |
No |
Medicaid |
R |
R |
No |
CHIP |
R |
R |
No |
Medicare/SNF |
R |
NR |
No |
Veterans Administration Benefits |
R |
NR |
No |
R = Required; NR = Not Required
[1] 111 AFTR 2d 2013-2385 (2013).
[2] POMS GN 00210 BASIC (Aug. 2013).
[3] POMS GN 00210 TN 05.
[4] 78 Fed. Reg. 66413 (Nov. 5, 2013).
[5] 78 Fed. Reg. 66413 (Nov. 5, 2013).
[6] POMS GN 00210 BASIC (Aug. 9, 2013).
[7] POMS GN 00210 TN 04 (effective 12-16-2013).
[8] POMS GN 00210 TN 03.
[9] Memorandum to CMS SHO #13-006 re United States v. Windsor (Sept. 27, 2013).
[10] Medicaid Communication No. 14-01 (Jan. 28, 2014).
[11] 78 Fed. Reg. 5182 (Jan. 24, 2013).
[12] 79 Fed. Reg. 3593 (Jan. 22, 2014).
[13] Medicare Health and Drug Plan Contract Administration Group, Impact on United States v. Windsor on Skilled Nursing Facility Benefits for Medicare Advantage Enrollees (Oct. 29, 2013).
[14] Memorandum for Secretaries of the Military Departments under Secretary of Defense for Personnel and Readiness: Extending Benefits to Same-Sex Spouses of Military Members, Chuck Hagel (Aug. 13, 2013) and Memorandum for Secretaries of the Military Departments Chiefs of the Military Services: Further Guidance on Extending Benefits to Same-Sex Spouses and Military Members, Jessica L. Wright, Acting (Aug. 13, 2013).