In a unanimous decision, a three-judge panel of the U.S. Court of Appeals for the First Circuit held that Section 3 of the federal Defense of Marriage Act was unconstitutional. Section 3 denies federal economic and other benefits to legally married same-sex couples and to surviving same sex spouses. The court found that federalism bars Congress from interfering with states that opt to legalize same-sex marriages. A copy of the opinion is available here.
The Internal Revenue Service recently released Notice 2012-40 which provides guidance on the effective date of the $2,500 limit on salary reductions to health flexible spending arrangements (?Ç£FSA?Ç¥) under Section 125(i) of the Internal Revenue Code (?Ç£Section 125(i)?Ç¥). Section 125(i) was added by the Patient Protection and Affordable Care Act (?Ç£PPACA?Ç¥) and provides that a health FSA is not treated as a qualified benefit unless the cafeteria plan provides that an employee may not elect for any taxable year to have salary reduction contributions in excess of $2,500 made to such arrangement. Notice 2012-40 clarifies that the Section 125(i) $2,500 limit does not apply for plan years that begin before 2013. Accordingly, the $2,500 limit on health FSA salary reduction contributions applies on a plan year basis and is effective for plan years beginning after December 31, 2012. Notice 2012-40 also provides that for plans providing a grace period, unused… Continue Reading