Are Health Insurance Premiums Tax Deductible?

Yes—but only in specific situations. Understanding the rules for deducting health insurance premiums can help you legally reduce your taxable income and potentially save hundreds or even thousands of dollars per year.

1. Self‑Employed? You May Deduct 100%

If you’re self-employed and report income on Schedule C, F, or as a partner/shareholder, you can typically deduct 100% of your health insurance premiums. This applies to coverage for yourself, your spouse, dependents, and children under 27—even if they’re not claimed as dependents on your taxes. Best of all, this deduction reduces your adjusted gross income (AGI) and doesn’t require you to itemize.

2. Employer Plans: Usually Already Pre-Taxed

If your health insurance comes through your employer, premiums are typically deducted from your paycheck before taxes. That means they’re already tax-advantaged—and cannot be deducted again. If, however, you pay part of your premiums with after-tax dollars, you may be eligible for a deduction, but only if you itemize and your total unreimbursed medical expenses exceed 7.5% of your AGI.

3. Individual, ACA, and COBRA Plans

If you’re not covered through an employer and pay for your own plan (through the ACA Marketplace, COBRA, or directly with an insurer), premiums may be deductible. But again, this only applies if you itemize deductions and your total medical costs exceed 7.5% of your AGI.

4. What Premiums Count?

Eligible for Deduction (if itemizing and threshold is met):

• After-tax premiums for medical, dental, or vision insurance

• Medicare Part A, B, C, and D

• Long-term care insurance (subject to IRS age limits)

Not Eligible for Deduction:

• Employer-paid or pre-tax premiums

• Life insurance or disability premiums

• Premiums paid from HSA, FSA, or HRA accounts

• Premiums already claimed under self-employed deduction

5. When Does Itemizing Make Sense?

In 2024, the standard deduction is $14,600 for individuals and $29,200 for married couples filing jointly. You should itemize only if your total deductions—including qualifying medical expenses—exceed these amounts. Otherwise, you’ll get more benefit from the standard deduction.

6. Final Comparison Table

Final Takeaway

Health insurance premiums are tax-deductible in many cases—but not all. Self-employed individuals enjoy the most direct benefits, while others must meet strict requirements and itemize to qualify. Understanding the rules can lead to smarter tax planning and real savings.

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