HR 3327119th CongressIn Committee

Public Safety Retirees Healthcare Protection Act of 2025

Introduced: May 13, 2025

Economy & Taxes

Standard Summary

Comprehensive overview in 1-2 paragraphs

The Public Safety Retirees Healthcare Protection Act of 2025 would raise, from $3,000 to $6,000, the amount that can be excluded from gross income for distributions from governmental retirement plans when those distributions are used to pay health or long-term care insurance premiums for public safety officers. The change would apply to distributions made in tax years beginning after December 31, 2025. In short, eligible public safety retirees could receive more tax-free income from retirement-plan distributions used to cover health-related insurance costs.

Key Points

1The bill increases the applicable exclusion from $3,000 to $6,000 for distributions used to pay health and long-term care insurance premiums.
2It amends Section 402(l)(2) of the Internal Revenue Code of 1986.
3Effective date: applies to distributions in taxable years beginning after December 31, 2025 (i.e., starting with the 2026 tax year).
4The bill was introduced in the House as H.R. 3327, titled the Public Safety Retirees Healthcare Protection Act of 2025, by Rep. Bacon (and Rep. Cuellar) and referred to the Ways and Means Committee.
5Targeted scope: the provision applies to distributions from governmental retirement plans for public safety officers’ health and long-term care insurance premiums, not to distributions from private-sector retirement plans.

Impact Areas

Primary: Public safety retirees (e.g., police, firefighters, and other public safety officers) who receive distributions from governmental retirement plans and use those distributions to pay health or long-term care insurance premiums.Secondary: Taxpayers’ households receiving such distributions; federal revenue/offset considerations due to increased tax-free amounts; administrators of governmental retirement plans who process distributions and related premiums.Additional impacts: Potential administrative work for taxpayers and tax preparers to track and document the portion of distributions used for insurance premiums; potential behavioral response from retirees regarding timing of distributions to maximize the tax exclusion.

Generated by gpt-5-nano on Oct 7, 2025