What Health Insurance Premiums Are Not Tax Deductible? (And Common Mistakes to Avoid)

Health insurance can be one of the biggest expenses for American families, especially for the self-employed, freelancers, and those without employer coverage. The good news is that some health insurance premiums are tax-deductible — but not all of them.

Understanding which premiums qualify and which don’t can help you avoid costly tax filing mistakes and potentially save hundreds or even thousands of dollars.

Let’s break down what health insurance premiums are not tax deductible and the common mistakes you should avoid in 2024.

✅ What Types of Health Insurance Premiums Are Tax Deductible?

Before jumping into the “not deductible” list, let’s clarify which ones usually are deductible:

• Self-employed individuals can typically deduct premiums for themselves, their spouse, and dependents.

• Premiums paid for COBRA coverage (if you’re unemployed) can often be deducted if you itemize.

• Long-term care insurance premiums — but only up to certain age-based limits.

• Dental and vision insurance premiums, when paid out-of-pocket.

But these deductions usually apply only if your total medical expenses exceed 7.5% of your Adjusted Gross Income (AGI) and you’re itemizing your deductions.

❌ What Health Insurance Premiums Are NOT Tax Deductible?

Now for the big question: What can’t you deduct?

Here are the most common non-deductible premiums:

1. Employer-Provided Health Insurance (Pre-Tax)

If your employer pays for your health insurance or you pay your portion with pre-tax dollars (which most do), then you cannot deduct it again on your tax return. The benefit is already built into your paycheck.

2. Health Insurance Premiums Paid with HSA or FSA Funds

If you used money from a Health Savings Account (HSA) or Flexible Spending Account (FSA) to pay for insurance premiums, those premiums are not deductible. Why? Because those accounts already give you tax-free benefits.

3. Medicare Supplement (Medigap) Policies

While Medicare Part B, Part D, and Medicare Advantage premiums are usually deductible if you itemize, Medigap premiums are not. The IRS doesn’t count these as qualified medical expenses.

4. Premiums Paid Through a Marketplace With Premium Tax Credits

If you purchase coverage through the Health Insurance Marketplace and receive a premium tax credit, you can only deduct the portion you paid out-of-pocket, not the total premium.

5. Life Insurance Premiums

This one trips up many taxpayers. Even if bundled with health coverage, life insurance is not a deductible medical expense.

⚠️ Common Mistakes to Avoid

❌ Mistake 1: Double Dipping on Pre-Tax Premiums

If you paid premiums with pre-tax payroll deductions, you’re not allowed to claim a second deduction. Always check how your employer processed your health insurance payments.

❌ Mistake 2: Mixing HSA Funds with Deductions

If you used HSA funds for a medical premium, it’s already tax-free — don’t try to deduct it again.

❌ Mistake 3: Assuming All Medicare Costs Are Deductible

Only some Medicare premiums qualify. Medigap does not. Double-check before you file.

❌ Mistake 4: Not Itemizing Your Deductions

To deduct most health insurance premiums (unless you’re self-employed), you must itemize. If your standard deduction is higher, itemizing may not make sense — or be allowed.

🧾 Pro Tip: Keep All Your Health Insurance Records

For tax purposes, good documentation is key. Keep:

• 1095-A forms (if you got insurance through the Marketplace)

• Payroll records

• Bank statements showing premium payments

• Letters from Medicare or your insurer

🧠 Final Thoughts

Navigating health insurance tax deductions isn’t simple — but understanding what’s not deductible can help you avoid audits, rejections, and missed savings.

If you’re unsure whether your premium qualifies, speak with a CPA or use trusted tax software that walks you through itemized deductions. In 2024, every dollar counts — especially when you’re managing rising healthcare costs.

📌 FAQ (Plain Text for SEO Schema)

Q1: Are employer-sponsored health insurance premiums tax-deductible?
A: No, if your premiums are paid with pre-tax dollars through your employer, they are not deductible.

Q2: Can I deduct Medigap (Medicare Supplement) premiums?
A: No, Medigap premiums are not considered a deductible medical expense by the IRS.

Q3: Are premiums paid using HSA or FSA funds deductible?
A: No, since you already received tax benefits for using HSA/FSA funds, you cannot deduct those premiums.

Q4: What if I buy insurance through the Marketplace with a subsidy?
A: You can only deduct the part of the premium you paid out-of-pocket, not the portion covered by the premium tax credit.

Q5: Do I need to itemize to deduct premiums?
A: Yes, unless you’re self-employed, most people must itemize deductions and exceed the 7.5% AGI threshold to deduct premiums.