HELPS Retirees Act to Include Self-Insured Health Plans

May 18, 2007 -- In a reversal from its previous position, the U.S. Treasury Department has announced that self-insured health plans will be eligible to participate in the Healthcare Enhancement for Local Public Safety (HELPS) Retirees Act. Under the previous interpretation, many fire fighter health plans were not eligible to receive the pre-tax payments under the HELPS program because they do not use an outside insurance company to provide health benefits.

At the request of the IAFF, several key members of Congress wrote to Treasury complaining that excluding self-insured health plans undermined the program, and was inconsistent with Congress’s intent. The letter, which was signed by the leaders of Congress’s two tax writing committees -- Representatives Charlie Rangel (D-NY) and Jim McCrery (R-LA) and Senators Chair Max Baucus (D-MT) and Charles Grassley (R-IA) -- members of Congress indicated that they would include corrective language in an upcoming “technical corrections” bill.

In the face of bipartisan criticism, Treasury agreed to change its interpretation to include self-insured health plans. In a letter signed by the Assistant Secretary for Legislative Affairs, Treasury agreed to cover “both insurance or an employer’s self funded plan.”

The HELPS Retirees Act was created by Congress in 2006 to allow retired public safety officers to shield up to $3,000 of the pension benefit from federal tax if the money is used to pay health insurance premiums.

To read a copy of Treasury’s letter, click here.