Healthcare Enhancement for Local Public Safety (HELPS) Retirees Implementation
On August 2, 2007, Senator Edward Kennedy, Chairman of the Senate Health, Education, Labor and Pensions Committee, introduced a bill to make technical corrections related to the Pension Protection Act of 2006 (PPA). Senators Baucus, Grassley and Enzi are original co-sponsors of the bill.
The bill amends the Healthcare Enhancement for Local Public Safety (HELPS) Retirees language that was passed as part of the Pension Protection Act of 2006. The Department of the Treasury found that the provision, which allows qualified public safety retirees to use up to $3,000 from their retirement plan to pay health care premiums, pertained only to payments to third party health insurance companies. Those public safety retirees who pay premiums to a self-funded plan would have been excluded from the benefit under Treasury's interpretation. NCPERS has been working over the course of several months to ensure that this fix is included in the technical corrections bill.
In May, Treasury indicated in a letter to Congressman Jim McRery (R-LA) that because it was the intent of Congress to include self-funded plans and because Congress would be seeking a legislative remedy in the technical corrections bill, the agency would allow beneficiaries of self-funded plans to take advantage of the benefit.. The technical corrections bill, when passed, will codify the intent of Congress.
NCPERS also has been meeting with members' offices to discuss a necessary technical correction to language in Section 828 of the PPA. The section deals with the tax treatment of DROP rollovers for public safety officers. As a result of poorly crafted language in the PPA, public safety officers between the ages of 50 and 59 1/2 who rollover a lump sum from a DROP to an IRA or governmental DC plan are no longer excluded from the 10 percent early withdrawal penalty. While the remedy on this aspect of the PPA was not included in the bill just introduced, NCPERS will continue to lobby for this change to be included in the current bill or subsequent legislation.
Information for HELPS Retirees Implementation
- Model Letter for Plans to send to Public Safety Participants (Posted 5/20/2015)
- Revised IRS Guidance on HELPS (Posted 01/10/08)
- Guidance Memo from Klausner & Kaufman regarding HELPS (posted 11/30/07)
- IRS Reporting Guidance for HELPS (courtesy of Policeman''s Annuity & Benefit Fund of Chicago)
- Frequently Asked Questions for Beneficiaries
- Frequently Asked Questions for Funds
- HELPS Retirees Implementation Checklist
- Model Enrollment Form