HELPS is a new retiree health care benefit that provides a tax-free distribution of up to $3,000 from retirement plans to help retirees pay for health insurance or long-term care insurance.


The IAFF won an unprecedented congressional victory with the passage of the Health Care Enhancement for Local Public Safety Officers (HELPS) act.  Under it, retirees can receive a tax-free distribution of up to $3,000 from retirement plans to help pay for health insurance or long-term care insurance premiums. The IAFF encourages affiliates to remind retirees about the HELPS benefit. 

Under the benefit, the IRS will allow retired fire fighters to exclude from income distributions made from eligible retirement plans up to $3,000 annually to pay the costs for accident or health insurance or long-term care insurance. The funds can cover the retiree, spouse or dependents. The distribution must be made directly from the retirement plan to the insurance provider. Eligible retirement plans include qualified trusts, section 403(a) plans, section 403(b) annuities and section 457(b) plans.

Read questions and answers written with fire fighters in mind.

IAFF Q & A (web site file)   or    IAFF Q&A (Word File)

The IRS requires retirees to report total distributions on Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. The taxable amount should be reported on Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. Also, retirees should write “PSO” (for public safety officer) next to the appropriate line where the taxable amount is reported. For tax accountants: refer to code section 402(l).

Download IRS 1040 (PDF, with helpful highlights)  ... this is the 2007 version, but it's still applicable.
 

National Conference on Public Employees Retirement Systems (HELPS website) ... includes these links:

• Information for HELPS Retirees Implementation
• 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

HELPS in the news:

IRS Publishes Instructions on HELPS Benefit

November 27, 2007 -- The IRS has published new instructions on how retired fire fighters can take advantage of the Healthcare Enhancement for Local Public Safety (HELPS) benefit on their 2007 tax returns.

Last year, the IAFF won an unprecedented congressional victory in the passage of the HELPS retiree health care benefit, a tax-free distribution of up to $3,000 from retirement plans to help retirees pay for health insurance or long-term care insurance premiums.

The IRS instructions for filing 2007 tax returns explains how to take advantage of this valuable benefit. The IRS will allow retired fire fighters to exclude from income distributions made from eligible retirement plans up to $3,000 annually to pay the premiums for accident or health insurance or long-term care insurance. The premiums can be for coverage for the retiree, spouse or dependents. The distribution must be made directly from the retirement plan to the insurance provider. Eligible retirement plans include qualified trusts, section 403(a) plans, section 403(b) annuities and section 457(b) plans.

The IRS requires retirees to report total distributions on Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. The taxable amount should be reported on Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. Also, retirees should write “PSO” next to the appropriate line where the taxable amount is reported.