Grassley and colleagues introduce legislation to help first responders access key retirement health benefits

WASHINGTON — Senators Chuck Grassley (R-Iowa), Sherrod Brown (D-Ohio), John Thune (RS.D.) and Mark Warner (D-Va.) have introduced legislation to make it easier for first responders to benefit from a benefit intended to help them cover their health expenses.

Under the current system, health insurance payments must flow directly from the pension scheme to the health insurer so that first responders can benefit from the existing tax advantage. Their new bipartisan proposal would improve and reform the Improving Health Care for Local Public Safety (HELPS) Act by no longer requiring payment to be made directly to Medicare. Instead, the distribution could be made directly to the retiree. Allowing payments to go directly to the retiree will allow first responders to exempt from tax up to $3,000 of a retirement distribution if they use it to pay for health care premiums.

“First responders play a vital role in our communities, dealing with a variety of high-stress emergency situations throughout their careers. All first responders should be able to take advantage of a tax benefit to help them access health coverage in retirement,” said Grassley.

“Ohio’s firefighters and other first responders are exhausted protecting our families and communities, and they shouldn’t have to worry about being penalized for giving up their deserved retirement,” said Brown. “This is a simple solution that allows first responders to keep their own money and take the pressure off state and local governments.”

“We owe a great debt of gratitude to our retired police officers, firefighters and other first responders who have dedicated their lives to protecting our communities and keeping our friends, families and neighbors in South Dakota safe,” said Coin. “Currently, it is extremely difficult for retired first responders to use an existing benefit that helps cover certain health care expenses, which is why I have introduced this legislation that would ensure that these retirees can make withdrawals tax-free from their pension and direct these amounts towards eligible insurance premiums.

“Virginia’s first responders put themselves in harm’s way every day to protect our communities – the least we can do is ensure they are cared for in retirement,” Warner said. “I am proud to present the bipartisan Police and Fire Protection Health Care Act 2022which will allow tens of thousands of retired officers – like Mr. Wally Bunker, a strong advocate and retired Culpepper police officer – to claim the benefits they have earned.

In order to implement the direct payment requirement under current legislation, state and local pension systems are now responsible for directly paying many health care and long-term care providers often and monitoring the evolution of premium amounts and payment terms for thousands, even tens of thousands. retirements. This already difficult task is made even more difficult because providers often communicate only with the insured retiree and not with the pension system. Information does not flow transparently and unintentional errors are made. In addition, due to the complexity, some pension systems have taken the decision not to put in place
AIDthus resulting in the ineligibility of retired public security officers covered by these pension plans for the tax benefit.

Under the senators’ bill, plans capable of implementing AID through the current method of direct payment, perhaps because they only have one or two suppliers to pay and a small number of retirees, can continue to do so. However, for the many pension systems that are having administrative problems with the current requirement or have refused to implement AID because of the charges, the senators’ legislation will allow them to make distributions to their retirees without making the retiree ineligible for the tax exclusion.

In cases where the distribution is made to the retiree, the legislation would require the retiree to include in their tax return certification that the amount they seek to exclude from the pension distribution does not exceed the amount paid by the employee for qualifying health insurance premiums for the tax year. The tax exclusion is capped under current law at $3,000 per year.

The bill has been endorsed by the Fraternal Order of Police, the National Association of Police Organizations and the International Association of Fire Fighters.

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