Senate bill would help retired firefighters, cops pay for healthcare coverage

A Senate committee voted Wednesday to advance legislation that will make it easier for retired public safety officers to get a tax benefit to pay for healthcare coverage.

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

The legislation is backed 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 living in Culpeper who was a police lieutenant for the Suffolk Police Department for nearly 22 years, where he served in patrol, investigations, internal affairs, communications, and undercover cases.

In his retirement, he has been blocked from accessing a critical tax benefit to help pay for his health and long-term insurance.

“America’s first responders go above and beyond to keep our communities and neighbors safe. When the intense physical and psychological demands of the job force some of these brave men and women to retire early, they should not be penalized” Spanberger said.

“To make sure that these local heroes are not left without coverage, we must make sure that retired officers can use tax-free payments from their pension plans to cover health insurance costs. Today moves us one step closer to securing this tax benefit for every retired officer — in Virginia and across the country — who earned it. I am grateful to the U.S. senators who recognized the need to remedy this issue and took action by passing this bill out of committee,” Spanberger said.

Many public safety officers retire early because of the unique physical demands and hazards they face on the job. As a result, many lose access to their employer-sponsored health coverage but are still years away from being eligible for Medicare.

To alleviate the burden of paying out-of-pocket for health insurance, Congress included in the Healthcare Enhancement for Local Public Safety Retirees Act a provision that allows retired public safety officers to withdraw $3,000 tax-free from their pension plan annually to pay health or long-term care insurance premiums.

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

Provisions that would eliminate the “direct pay” provision and ensure that retired first responders in Virginia can access the benefit, was incorporated into a larger package of retirement reforms passed by the Senate Finance Committee today as part of the EARN Act.

The EARN Act is expected to be combined with a related set of proposals that were approved earlier this month by the HELP Committee, and the comprehensive package will be put before the full Senate sometime in the coming weeks.

“Virginia’s first responders put themselves at risk every day to protect our communities – the least we can do is ensure that they are taken care of in retirement,” Sen. Warner said. “This commonsense bill will make it easier for retired fire fighters and police officers to access quality healthcare after a career of working to keep our communities and our families safe.”