H.R.3327 - Public Safety Retirees Healthcare Protection Act of 2025 (119th Congress)
Summary
H.R. 3327, the Public Safety Retirees Healthcare Protection Act of 2025, proposes to amend the Internal Revenue Code of 1986. The amendment aims to increase the amount excluded from gross income for distributions from governmental retirement plans used for health and long-term care insurance for public safety officers. Specifically, it seeks to raise the exclusion limit from $3,000 to $6,000.
Expected Effects
The bill, if enacted, would allow public safety officers to exclude a larger portion of their retirement distributions from gross income when used for health and long-term care insurance. This could reduce their tax burden and make healthcare more affordable in retirement. The change would apply to taxable years beginning after December 31, 2025.
Potential Benefits
- Increased financial relief for public safety retirees, allowing them to better afford healthcare.
- Potential for improved health outcomes among retirees due to increased access to healthcare.
- May incentivize individuals to pursue careers in public safety, knowing that healthcare costs in retirement may be more manageable.
- Could reduce the burden on public assistance programs if retirees are better able to afford their own healthcare.
- Simplifies the tax code for public safety officers regarding retirement distributions for healthcare.
Potential Disadvantages
- Potential reduction in federal tax revenue due to the increased exclusion.
- May disproportionately benefit higher-income public safety officers who are more likely to have retirement plans and healthcare needs.
- Could create pressure to extend similar benefits to other professions, further reducing tax revenue.
- The increased exclusion may not be sufficient to cover the rising costs of healthcare and long-term care.
- Complexity in administering and tracking the increased exclusion.
Most Disadvantaged Areas:
Constitutional Alignment
The bill appears to align with the general welfare clause of the Constitution (Preamble), as it aims to improve the financial well-being of public safety retirees by reducing their tax burden related to healthcare. Congress has the power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States (Article I, Section 8, Clause 1). The bill falls under this power as it modifies the tax code.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).