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The HELPS Retirees Act of 2005: Q&A

Representatives Chris Chocola (R-IN) and Richard E. Neal (D-MA)

What does the bill do?  The bill would allow retired public safety officers to use up to $5,000 annually from their pension funds, including defined benefit plans and defined contribution plans, to pay for qualified health insurance premiums without taxing these distributions (excluded from gross income).

 Why is the bill necessary?  Because of the physical demands and unique job hazards faced by public safety officers, they often retire earlier than other occupations and face significant healthcare needs.  Unfortunately, many retirees lose their employer-provided health insurance and are years away from being Medicare-eligible, which forces them to spend their retirement money on health insurance premiums.

 Examples of mandatory retirement age rules include state and local police (55-60) and firefighters (55-60); federal firefighters (57); and federal law enforcement and corrections officers (57).

 What is a public safety officer?  “Public safety officer” is defined in law as “an individual serving a public agency in an official capacity, with or without compensation, as a law enforcement officer, firefighter, or rescue squad or ambulance crew” (federal, state, and local).

 What is a qualified health insurance premium?  Premiums for coverage provided by an accident or health insurance plan or a long-term care insurance contract for a retired public safety officer, his spouse, and dependents.

Where does the money come from?  The money comes directly from a public safety officer’s personal retirement funds, including defined benefit plans and defined contribution plans.  For purposes of the $5,000 annual limit, all eligible retirement plans are treated as a single plan.

Does the bill create new government programs?  No.  The bill does not create new government programs or provide public safety officers access to healthcare options they don’t already have.  It simply makes existing options more affordable with a modest tax benefit.

 Rep. Chocola Staff Contact:  Rich Dunn, rich.dunn@mail.house.gov , 225-3915

Rep. Neal Staff Contact:  Peg McGlinch, peg.mcglinch@mail.house.gov , 225-5601