Biden signs 'Wally Bunker Law' to protect benefits for retired police officers, firefighters

President Joe Biden last week signed into law U.S. Representative Abigail Spanberger’s legislation to ensure parity for all retired police officers and firefighters and provide access to a key tax benefit that helps them cover their health insurance premiums.

Many public safety officers retire earlier than Americans in other occupations because of the physical demands and unique job hazards they face on the job. Unfortunately, when they retire early, many lose access to their employer-sponsored health coverage but are still years away from Medicare eligibility.

To prevent high out-of-pocket health insurance costs, Congress included in the Healthcare Enhancement for Local Public Safety Retirees Act a provision that allows retired public safety officers to withdraw $3,000 tax-free from their pension plan annually to pay health or long-term care insurance premiums. However, the 2006 law required that pension plans pay the $3,000 directly to the insurer, and many smaller pension plans use a third-party system for disbursing payments, therefore preventing many retirees from accessing the benefit.

Spanberger’s legislation removes the requirement that pension fund distributions must go directly to the insurer to be eligible for tax-free status — and it ensures that retired first responders can access a critical tax benefit to help cover health and long-term insurance. This provision is based on her Wally Bunker Healthcare Enhancement for Local Public Safety Retirees Improvement Act.

The bipartisan Wally Bunker HELPS Retirees Improvement Act is named after Wally Bunker, a 74-year-old retired police officer now living in Culpeper, Virginia — in Spanberger’s district. Bunker was a police lieutenant for the Suffolk Police Department for nearly 22 years — where he served in patrol, investigations, internal affairs, communications, and undercover cases. Since his retirement and the passage of the original HELPS Retirees Act, Bunker has been unable to access the pre-tax benefit for health and long-term insurance due to the direct payment requirement. The City of Suffolk uses a third-party company for retirement distributions to insurance providers — meaning he is currently excluded from the benefit.

Spanberger and U.S. Representative Steve Chabot (R-OH-01) introduced the bipartisan legislation in March 2022. The Wally Bunker HELPS Retirees Improvement Act is endorsed by the National Fraternal Order of Police, International Association of Fire Fighters, and National Association of Police Organizations.