Enhancing healthcare coverage for public safety retirees
Important improvements to the Healthcare Enhancement for Local Public Safety (HELPS) Retirees Act
What is HELPS?
Since its passage in 2006, the HELPS Act has allowed retired public safety officers to benefit from an annual pre-tax distribution of up to $3,000 from the government when used to pay for healthcare or long-term care insurance. However, the legislation required that the government retirement plan made the premium payments directly to the insurance provider.
Unfortunately, the high administrative burden prevented many government retirement plans from implementing the direct payments to insurance providers, which prevented eligible public safety retirees from accessing this important benefit (1).
What is new?
In December 2022, Congress passed legislation to enhance the HELPS Retirees Act that removed the requirement that premiums be paid directly by the government retirement plan. Now, all eligible public safety retirees can elect to exclude up to $3,000 from their taxable income from an eligible government retirement plan.
Why is this important?
Since 2003, there have been significant legislative updates impacting retiree healthcare, including the Medicare Modernization Act, the Affordable Care Act, the American Rescue Plan Act, and the Inflation Reduction Act. The laws have created and strengthened health insurance markets for retirees by driving competition among insurers, eliminating barriers to coverage, enhancing benefits and providing government subsidies to lower the cost of healthcare. As a result of finding better value on the individual market, there has been dramatic growth in enrollment in plans purchased directly by individuals as compared to group purchasing (4). Many public safety retirees are choosing to waive group health plan coverage from former employers because they can find better value by purchasing individual coverage. Now these public safety retirees can also take full advantage of the pre-tax distribution they earned as a public safety officer.
Via Benefits respects the sacrifices made by our public safety officers, which is why it advocated for the passage of the 2022 HELPS Retirees legislation by educating lawmakers of the administrative challenges to the law in its previous form and how to improve access to the benefit for public safety retirees.
1. spanberger.house.gov/posts/president-signs-into-law-spanbergers-bipartisan-legislation-to-protect-tax-credits-of-retired-police-officers-firefighters and
ncpers.org/blog_home.asp?display=193
2. nerdwallet.com/article/taxes/federal-income-tax-brackets
3. irs.gov/pub/irs-dft/p575--dft.pdf
4. kff.org/policy-watch/as-aca-marketplace-enrollment-reaches-record-high-fewer-are-buying-individual-market-coverage-elsewhere and
cms.gov/newsroom/press-releases/nearly-16-million-people-have-signed-up-affordable-health-coverage-aca-marketplaces-start-open
About Via Benefits by WTW
Via Benefits Insurance Services has helped more than two million people evaluate and enroll in individual health insurance. Via Benefits is a resource offering personal service to help retirees understand coverage options through a robust online experience supported by an award-winning customer service team. Founded in 2004, it operates the first and largest Medicare marketplace in the country and, in 2014, expanded to include individual and family plans for Pre-Medicare retirees.
WTW is not an accounting firm or a law firm and does not provide any legal, accounting or tax advice or opinions. All accounting information should be verified by your accountants, and you should consult your legal counsel and/or tax advisors with respect to any legal or tax questions.