Warner votes to help First Responders save money in retirement

The Senate Finance Committee today voted 28-0 to advance the Enhancing American Retirement Now (EARN) Act. The legislation includes a bipartisan proposal from Sen. Mark R. Warner (D-VA) to make it easier for tens of thousands of retired firefighters and police officers like Wally Bunker from Culpeper to get a tax benefit to pay for health coverage they’ve earned. Warner introduced the measure, which has been endorsed by the National Fraternal Order of Police, National Association of Police Organizations, and International Association of Fire Fighters, with Sens. Sherrod Brown (D-OH), John Thune (R-SD), and Chuck Grassley (R-IA) last month.

“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,” said Sen. Warner, a member of the Finance Committee, after voting to approve the legislation today. “This commonsense bill will make it easier for retired firefighters and police officers to access quality healthcare after a career of working to keep our communities and our families safe.”

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 (HELPS) 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.

The Warner-Brown-Thune-Grassley proposal, which 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.