Bipartisan legislation introduced by U.S. Sen. John Thune (R-SD) would ensure that the nation’s retired first responders may access their retirement income to pay for qualifying health insurance costs.
“Currently, it is extremely difficult for retired first responders to utilize an existing benefit that helps cover certain health care expenses,” said Sen. Thune, “which is why I introduced this legislation that would ensure these retirees can make tax-free withdrawals from their pension and direct those amounts to qualifying insurance premiums.”
Sen. Thune on May 25 signed on as an original cosponsor of the Police and Fire Health Care Protection Act of 2022, S. 4312, which is sponsored by U.S. Sen. Sherrod Brown (D-OH) to amend the Internal Revenue Code of 1986 to repeal the direct payment requirement on the exclusion from gross income of distributions from governmental plans for health and long-term care insurance, according to the text of the bill.
Under current law, retirement plans must make direct payments to a qualifying insurance plan in order for the premium payment to be excluded from a retiree’s gross income.
If enacted, S. 4312 would make the requirement optional and allow retirement plans to instead make distributions directly to the retiree who can then transmit the payment to the qualifying insurance plan while obtaining the tax benefit, according to a bill summary provided by Sen. Thune’s office.
The International Association of Fire Fighters and the Fraternal Order of Police endorsed the bill, which has been referred for consideration to the U.S. Senate Finance Committee.
“We owe a great debt of gratitude to our retired police officers, firefighters and other first responders who dedicated their lives to protecting our communities and keeping our friends, families and neighbors across South Dakota safe,” Sen. Thune said.