Healthcare Enhancement for Local Public Safety Act
The HELPS provision, found at IRC Section 402(l), allows an eligible retired public safety officer to exclude up to $3,000 annually of pension distributions used to pay qualified health or long-term care insurance premiums from taxable income.
Enacted as part of the Pension Protection Act of 2006, the exclusion requires premiums to be paid directly from the retirement plan to the insurance provider — not reimbursed to the retiree afterward. Married couples may each qualify for their own $3,000 exclusion, for up to $6,000 combined.
If you're a retired police officer, firefighter, or other public safety officer, up to $3,000 a year of your pension used toward health insurance premiums can come out tax-free — which can also help keep your income under IRMAA thresholds.
See how this played out in a real IRMAA case study.