On December 23, 2014, the U.S. Court of Appeals for the Second Circuit upheld the District Court’s dismissal of plaintiffs’ claims alleging that the same-sex spouse exclusion in the employer’s self-insured medical plan violated Section 510 of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and also dismissed plaintiffs’ breach of fiduciary duty claim under Section 404 of ERISA.

As you may recall, the underlying case, Roe v Empire Blue Cross Blue Shield, decided by the District Court of the Southern District of New York, involved an employee of St. Joseph’s Medical Center who tried to add her same-sex spouse as a covered dependent under the employer’s self-insured health plan administered by Empire Blue Cross Blue Shield. The plan at issue did not define “spouse” but it did expressly exclude same-sex spouses and domestic partners. The District Court granted defendants’ motion to dismiss the ERISA 510 claim because there was no allegation that an adverse employment action was taken in retaliation for asserting rights under ERISA or for the purpose of interfering with the attainment of those rights. The District Court reasoned that ERISA 510 only prohibits interference with the employment relationship and that Roe was still employed by St. Joseph’s Medical Center and had suffered no adverse employment action.  Having held that the exclusion did not violate Section 510 of ERISA, the District Court dismissed the ERISA 404 claim because it was based on an argument that enforcing an unlawful plan term constituted a breach of fiduciary duty. To read more about the underlying case click here to see our prior blog post.

After conducting a de novo review, the Second Circuit concluded, in an unpublished opinion, that the District Court properly dismissed the ERISA 510 claim because plaintiffs failed to adequately allege any right to which they are entitled, or may become entitled under the plan with respect to which defendants discriminated against them or with which defendants otherwise interfered. The Second Circuit also concluded that the District Court properly dismissed the ERISA 404 claim because plaintiffs did not adequately allege that defendants were acting in a fiduciary capacity or that they breached any fiduciary duty under ERISA.

Employers considering such an exclusion for their self-insured plans should note that the decision is expressly limited to consideration of the ERISA claims and both the District Court and Second Circuit declined to address whether the exclusion is constitutional or valid under any other federal or state law. Same-sex spouse exclusions will likely be challenged on other grounds. In addition, the legal landscape surrounding same-sex marriages continues to change as the U.S. Supreme Court recently agreed to decide whether the Fourteenth Amendment requires states to allow same-sex couples to marry and whether it requires states to recognize same-sex marriages performed in other states.

Stay tuned!