RETIREE HEALTH CARE

FACT SHEET

BACKGROUND

The nation’s public safety officers (law enforcement officers, fire fighters and emergency medical personnel) face special health care challenges after retiring from their job. The men and women in these occupations generally retire earlier than their peers in other fields, either because of mandatory retirement ages or the structure of their pension system. Most emergency responders leave employment long before they are eligible for Medicare.

In addition, many public safety officers have significant health care needs resulting from years of working in dangerous, stressful environments. Long term exposures to smoke, toxic substances, biohazards, temperature extremes, and persistent stress take their toll on the health of our nation’s domestic defenders.

With the soaring cost of health care, retired public safety officers are finding it more and more difficult to afford health insurance once they separate from service. Currently, many fire fighter retirees use more than 80% of their pension checks to pay for health insurance. In extreme cases, the cost of insurance exceeds their pension benefit.

To address the dire need for enhanced access to health insurance for retired fire fighters, the IAFF is proposing a change to the federal tax code to allow retired public safety officers to use a portion of their retirement funds for health insurance premiums on a pre-tax basis.

LEGISLATION

Reps. Chris Chocola (R-IN) and Richard Neal (D-MA) introduced H.R.2177, the Healthcare Enhancement for Local Public Safety (HELPS) Retirees Act. The legislation would enable retired public safety officers to designate up to $5,000 per year from pension funds for health insurance premiums, and the money would not be treated as taxable income. Retirees would authorize direct payments to qualified health insurance plans from their governmental pension or their deferred compensation funds, such as 403(b) or 457 plans.

IAFF POSITION

The IAFF supports the HELPS Retirees Act.

CURRENT STATUS

On May 5, 2005, H.R.2177 was introduced and referred to the House Committee on Ways and Means.

HELPS Passes the House

December 20, 2005 – The IAFF scored a huge victory last week in the fight to secure affordable health insurance for retired fire fighters. Following aggressive lobbying by the IAFF, the Pension Protection Act – which includes one of the IAFF’s major political initiatives, the Healthcare Enhancement for Local Public Safety (HELPS) Retirees Act -- passed the U.S. House by a vote of 294-132.

“The hard truth is that paying for health insurance yourself comes with a hefty price tag –and is a financial burden that our retired brothers and sisters should not have to carry,” says IAFF General President Harold Schaitberger. “With this legislation, we have cleared a major hurdle in eliminating that burden. As this bill makes its way to the Senate, I encourage all of our members to tell their senators how important this legislation is.”

HELPS was crafted by the IAFF to respond to the growing problem of high health insurance premiums facing retired fire fighters. Due to budget issues, many municipalities are canceling retiree health insurance or are requiring them to pay high premiums.

The HELPS Retirees Act creates an opportunity for retired public safety officers to purchase their health insurance on a pre-tax basis. Retired fire fighters, EMTs and police officers would also be able to set up a direct payment system from their pension or deferred compensation to their health insurance provider. The funds paid directly to the insurance company would not be considered income for federal tax purposes. In addition, retired fire fighters would be allowed to shield up to $5,000 in earnings per year from federal taxation.

Representative Chris Chocola (R-IN), a member of the House Ways and Means Committee, championed the IAFF initiative from the very beginning by sponsoring the bill. On behalf of the fire fighters, Chocola made the legislation a provision of the Pension Protection Act, and Representative Bill Thomas (R-CA), Committee chair, attached HELPS to the pension bill.

While the House vote is a big step towards final passage of HELPS, the battle is not over. A U.S. Senate pension bill that does not include HELPS will be reconciled along with the HELPS pension bill in a House-Senate Conference Committee. The IAFF will work to have HELPS included in the final product.