PERAC Memo #10 - 2009: UPDATE Exclusion from Gross Income of Payments for Health Insurance Premiums

UPDATE Exclusion from Gross Income of Payments for Health Insurance Premiums

Summary

This memo confirms there have been no changes to the Pension Protection Act provision (previously detailed in PERAC Memos #37/2007 and #43/2007) allowing retired public safety officers to exclude up to $3,000 from gross income for health insurance or long-term care insurance premiums deducted from their retirement allowance. No new board action is required; boards should continue following the procedures outlined in the earlier memos.

Full Text

MEMORANDUM #10, 2009 M E M O R A N D U M TO: All Retirement Boards FROM: Joseph E. Connarton, Executive Director RE: UPDATE Exclusion from Gross Income of Payments for Health Insurance Premiums DATE: February 9, 2009 PERAC Memos # 37/2007 and # 43/2007 discussed the Pension Protection Act of 2006 (“PPA”), highlighting several sections of special interest to public retirement plans. Of most interest, was the provision of the PPA that allows retired public safety officers to exclude from their gross income an amount up to $3,000 that is deducted from a taxable retirement allowance for health insurance premiums or long term care insurance contracts. There have been no changes in these federal provisions, so the instructions in the earlier PERAC Memos remain in place. If you have questions, please contact PERAC’s General Counsel, Barbara Phillips, (617) 666-4446 Extension 902.