Senate bill would help retired firefighters, police pay for health insurance

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A Senate committee voted Wednesday to push legislation that would make it easier for retired public safety officials to get a tax break to pay for health insurance.

The Enhancing American Retirement Now has been supported by the National Fraternal Order of Police, the National Association of Police Organizations and the International Association of Fire Fighters.

The legislation is supported by Sen. Mark Warner and Seventh District Congresswoman Abigail Spanberger, whose Wally Bunker HELPS Retirees Improvement Act is part of the bill.

Wally Bunker is a 74 year old retired Police Officer now based in Culpeper and was a Police Lieutenant for the Suffolk Police Department for almost 22 years where he served in patrol, investigation, internal affairs, communications and undercover cases.

In his retirement, he was denied access to a critical tax benefit to fund his health and long-term insurance.

“America’s first responders are doing everything we can to protect our communities and neighbors. If the intense physical and psychological demands of the job are forcing some of these brave men and women to take early retirement, they shouldn’t be penalized,” Spanberger said.

“To ensure these local heroes aren’t left without funds, we need to ensure that retired civil servants can use tax-free payments from their pension plans to cover health insurance costs. Today brings us one step closer to ensuring that tax benefit for every retired officer—in Virginia and across the country—who deserves it. I am grateful to the U.S. Senators who recognized the need to fix this issue and took action by passing this legislation outside of committee,” Spanberger said.

Many public safety officers take early retirement due to the unique physical demands and hazards they face on the job. As a result, many are losing access to their employer-sponsored health insurance but are years away from being eligible for Medicare.

To ease the burden of out-of-pocket health insurance payments, Congress included a provision in the Healthcare Enhancement for Local Public Safety Retirees Act that allows retired public safety officials to withdraw $3,000 annually tax-free from their retirement plan to fund health care – or to pay health insurance contributions to long-term care insurance.

The 2006 law required pension plans to pay the $3,000 directly to the insurer — but many smaller pension plans in Virginia and other states use a third-party system to make payments, preventing many retirees from accessing the benefit.

Provisions that would eliminate the “direct pay” provision and ensure that retired first responders in Virginia have access to benefits were included in a larger package of pension reforms passed today by the Senate Finance Committee as part of the EARN Act.

The EARN bill is expected to be combined with a number of related proposals approved by the HELP committee earlier this month, and the comprehensive package will be presented to the full Senate sometime in the coming weeks.

“Virginia’s first responders put themselves at risk every day to keep our communities safe — the least we can do is make sure they’re cared for in retirement,” Sen. Warner said. “This sensible law will make it easier for retired firefighters and police officers to access quality health care after a career working to keep our communities and our families safe.”

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