The Pension Protection Act (PPA) of 2006 made some of the most dramatic changes to America's pension laws in decades.
The sweeping legislation was vast in scope and as a result impacted many saving and investment opportunities for retirees. One of the components within the PPA was the Healthcare Enhancement for Local Public Safety (HELPS).
This page focuses on how this enhancement impacts FPPA Retirees and their healthcare choices.
This component of the PPA grants eligible retired public safety officers an annual federal income tax exclusion of up to $3000 for amounts paid to cover the cost of qualified health insurance premiums on behalf of the member, his or her spouse, or dependents. To qualify, premiums must be paid through payroll deduction directly from the member’s pension plan benefits. Beneficiaries receiving direct distributions from a member’s pension plan are not eligible for the exclusion. Each member may only take one $3000 exclusion annually, even if they are receiving more than one type of eligible pension. Moreover, the member’s monthly pension benefit must be equal to or greater than the amount of the member’s monthly insurance premium.
Information about member eligibility, how the tax exclusion is claimed, and options for direct payments are covered in the following publication. Pension Protection Act Q&A.
There are several employer group health or FPPA sponsored insurance programs for which FPPA is currently withholding and paying monthly insurance premiums for retirees.
If you are an employer offering a group plan that is not listed or a member enrolled in an employer group plan that is not listed, we strongly encourage you to contact FPPA for more information as to how your group plan can qualify for participation in this program.
FPPA has made arrangements for the direct payment of insurance premiums for retirees enrolled in the AARP Medicare Supplement Insurance Plans and/or the AARP MedicareRx Plans insured through UnitedHealthcare. The program is only available to FPPA members age 65 or over whose monthly insurance premium(s) do not exceed their monthly pension benefit.
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