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Cancer insurance payment process to change


Public Safety Personnel Retirement System
State of Arizona


Cancer insurance payment process to change
Registration now open for Dec. 2 and 9 educational seminars

The process for making certain payments in accordance with the PSPRS Cancer Insurance Policy for public safety members and retirees will change January 1, 2021.

This process change will not affect cancer insurance payments to CORP members and retirees. There is no cancer insurance available for EORP members.

Beginning in 2021, PSPRS will provide funds to employers related to certain taxable cancer diagnosis claims by active members and retirees. Although PSPRS has processed these payments to date, employers will be responsible for distributing these cancer insurance payments to impacted active members and retirees, via their internal payroll processes, in order to comply with IRS reporting requirements.

The process changes, made to comply with IRS regulations, will subject some cancer diagnosis claims to federal and state income tax withholding, and, if applicable, Medicare taxes and Social Security taxes, and reported on federal W-2 tax forms.

PSPRS has opened registration for remote educational sessions on Wednesday, December 2 at 1 pm, and Wednesday, December 9 at 9 am, to help provide employers information about the following:

  • Understanding how the new process may require creating new employer payroll codes for cancer insurance payments
  • Complying with federal HIPAA medical privacy requirements
  • Processing member and retiree payments through W-2 forms
  • Consulting about tax implications for active members and retirees
  • Answering all questions to assure a smooth transition

Thank you for your continued support and work on behalf of Arizona’s first responders. PSPRS will provide employers, including payroll and human resources professionals, with all relevant legal and operational details, including instructions on how to register for the upcoming seminars.

Please direct cancer insurance-related inquiries to PSPRS Employer Relationship Manager Phil Coleman by emailing [email protected] or calling 602-296-2553.