National Conference on Public Employee Retirement Systems

The Voice for Public Pensions

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Healthcare Resources

Healthcare is an important aspect to any public pension and public employee. With healthcare prices skyrocketing, it is imperative to protect public employee healthcare. 
 

Creating a Retiree Medical Trust: How Employers and Employees Can Use Pre-Tax Dollars to Fund Their Retiree Medical Expenses

Creating a Retiree Medical Trust: How Employers and Employees Can Use Pre-Tax Dollars to Fund Their Retiree Medical ExpensesThe 2006 report “Creating a Retiree Medical Trust” identified RMTs as a single, cost-effective solution to the issue of rising retiree medical costs. Since then, retiree medical trusts (RMTs) have grown and thrived, adding innovations and protections for retirees and providing powerful examples of success for pension systems that are weighing options. These trusts now pay monthly benefits ranging from roughly $150 per month to $1,300 per month (after 20 years of service) for life, plus a surviving spouse benefit. While these amounts might not be life changing and won’t solve the underlying issue of controlling rising healthcare costs, they can provide public servants with added peace of mind about their ability to afford health care in retirement.

This 2022 update examines the advantages and mechanics of RMTs with a focus on the needs and concerns of public sector employers, union officials, pension plans, and plan administrators and trustees.
 

What Public Pensions Should Know About the Healthcare Enhancement for Local Public Safety Act (HELPS)

The Healthcare Enhancement for Local Public Safety Retirees Act (HELPS) allows eligible retired public safety officers to exclude from gross income up to $3,000 in annual distributions from a governmental retirement plan to pay qualified health care insurance or long-term care insurance premiums. HELPS was enacted as part of the Pension Protection Act of 2006.

Section 328 of the SECURE Act 2.0 modified the direct payment requirement under HELPS by making it optional and created an alternative to the direct payment method, namely allowing the retirement plan to make the distribution to the retired public safety officer. Read frequently asked questions about the Healthcare Enhancement for Local Public Safety Retirees Act (HELPS).