Dear Senators Brown, Thune, Warner, and Grassley,
I am writing on behalf of the members of the Fraternal Order of Police to advise you of our strong support for S. 4312, the “Police and Fire Health Care Protection Act.”
In 2006, Congress enacted the HELPS Retirees Act, which provided a modest tax benefit to help retired public safety officers afford health insurance by allowing the use, on a pre-tax basis, of up to $3,000 annually from their pension funds (including defined benefit plans and defined contribution plans) to pay for premiums on health care and long-term care insurance. The FOP was proud to have played a leading role in developing this legislation to help address the rising health care costs faced by many of our retired members. Because of the physical demands of their profession, law enforcement and other public safety officers often retire earlier than other occupations. In fact, many local, State and Federal agencies have mandatory retirement ages for their officers. In these instances, retired officers may lose their employer-provided health insurance upon or shortly after their retirement—a time when they are years away from being eligible for Medicare. This, coupled with the fact that law enforcement and other public safety officers face greater health care needs than other professions because of the hazards they faced in the line of duty, forces them to spend a considerable amount of their limited income on health insurance premiums. Many retired public safety officers were able to take advantage of this benefit.
However, too many public safety officers are ineligible or lost their eligibility for this benefit because of the law’s “direct pay” requirement. This means that the public pension system must pay the health or long-term care insurance company directly in order to exclude these payments from the employee’s gross income.
This legislation would remove this requirement and allow all retired public safety officers to take advantage of this benefit and withdraw from their retirement without being penalized. Additionally, this bill would revise the program by changing the State and local direct payment requirement from mandatory to optional. This would allow the retirement system to make the distribution to the retired public safety officer. The retiree would then be able to make the premium payment while remaining eligible for tax exclusion.
We are proud to have partnered with all of you to help our retired members and retired public safety officers nationwide. On behalf of the more than 364,000 members of the Fraternal Order of Police, thank you for your support and leadership on this important issue. If I can provide any additional information in support of S. 4312, please do not hesitate to contact me or Executive Director Jim Pasco in our Washington, D.C. office.