Public Safety Retirees Healthcare Protection Act of 2025
- Bill Number
- H.R. 3327
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2025-05-13: Referred to the House Committee on Ways and Means.
- Last Updated
- 2026-04-22T08:07:06Z
AI-Generated Summary
Purpose
The Public Safety Retirees Healthcare Protection Act of 2025 aims to provide greater tax relief to retired public safety officers by increasing the amount of money they can receive tax-free from their governmental retirement plans to pay for health and long-term care insurance premiums.
Key Provisions
- Amends Section 402(l)(2) of the Internal Revenue Code of 1986, which currently allows up to $3,000 in distributions from eligible governmental retirement plans to be excluded from gross income (taxable income) if used for qualified health or long-term care insurance.
- Increases this exclusion limit to $6,000 per year.
- Applies the change to distributions in taxable years beginning after December 31, 2025.
Significant Changes to Existing Law
- Doubles the annual tax exclusion amount from $3,000 to $6,000, making more retirement funds available tax-free specifically for insurance costs.
- No other alterations to eligibility criteria, such as who qualifies as a public safety officer (e.g., law enforcement, firefighters, or emergency medical personnel) or what types of plans are covered (governmental deferred compensation plans like those under Section 457).
Potential Impacts
- On citizens: Benefits retired public safety officers by reducing their federal tax liability on up to an additional $3,000 of retirement distributions used for insurance, potentially lowering out-of-pocket healthcare costs and improving financial security in retirement.
- On government agencies: The Internal Revenue Service (IRS) will need to update tax forms, guidance, and enforcement processes to reflect the higher exclusion, but the administrative burden is likely minimal as it involves a straightforward numerical change.
- On international relations: No direct impact, as this is a domestic tax policy focused on U.S. public servants.
Main Stakeholders Affected
- Primary: Retired public safety officers who rely on governmental retirement plans for health and long-term care insurance premiums.
- Secondary: Their families, who may benefit indirectly from reduced financial strain; governmental pension funds and plan administrators, who handle distributions; and the broader taxpayer base, through minor effects on federal revenue.
Notable Legal, Constitutional, or Political Implications
- Legal: Represents a targeted adjustment to tax law under Congress's authority to regulate federal taxation (Article I, Section 8 of the U.S. Constitution), with no apparent conflicts to existing statutes. It promotes equity for public servants without altering broader tax code structures.
- Constitutional: No significant issues, as it involves fiscal policy rather than individual rights or federalism concerns.
- Political: Highlights bipartisan support for first responders (introduced by Representatives Bacon and Cuellar from different parties), potentially influencing future retiree benefit discussions, but reduces federal tax revenue slightly (estimated low due to the narrow scope).
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (4)
Rep. Cuellar, Henry [D-TX-28], Rep. Lawler, Michael [R-NY-17], Rep. Smith, Christopher H. [R-NJ-4], Rep. Gottheimer, Josh [D-NJ-5]
Recent Actions
- 2025-05-13: Referred to the House Committee on Ways and Means.
- 2025-05-13: Introduced in House
- 2025-05-13: Introduced in House
Bill Versions
- Public Safety Retirees Healthcare Protection Act of 2025 — issued 2025-05-13 — PDF (2 pages)