You use pre-tax dollars to pay for the health insurance through your employer and use after-tax dollars when you buy the insurance through the exchange. So can you deduct the costs you pay for health insurance premiums? As is the case with most tax questions, the short answer is it depends. If you are self-employed, you may be able to take a tax deduction for the premiums you pay for medical, dental and even qualifying long-term care insurance for you and your family. This deduction is in the form of an adjustment to income and is taken on page one of your form 1040. You can claim it even if you do not itemize deductions or your other deductions are limited.
Increase in employer health insurance costs slows in 2013
Even if your employer already offers health insurance, there’s nothing to prevent you from shopping on your state’s exchange. However, if you decide to leave your work-based plan and purchase coverage on the exchange, you “may not qualify for some of the benefits that the uninsured have,” notes E. Denise Smith, a professor of health care management at Gardner-Webb University in Boiling Springs, N.C. Here’s the big hiccup: Unless your employer’s coverage for an individual is considered unaffordable under the law (that is, if your share of the premiums costs more than 9.5% of your household income) or inadequate (picking up less than 60% of the cost of covered benefits), you aren’t eligible for a government subsidy to help pay for your insurance.
ObamaCare Exchanges vs. Employer Health Insurance
One is the volume, which Health and Human Services estimates at 14.6 million unique visitors, and the second is the platform’s design. The main problem, Schuyler said, could be “core fundamental design flow,” but it’s impossible to know because HHS is saying so little. “Only the contractors and HHS know that,” he said. They need to figure out the problem soon, Schuyler said, if the government is to meet its goal of 7 million new health customers signing up on the exchanges by March 31. “That’s 39,000 enrolled a day, and we’re not seeing anywhere near that volume,” Schuyler said. “If they don’t get it fixed within two or three weeks, we may have a backlog of consumers who won’t be able to enroll by January 1.” HHS didn’t have enough time to test its system for “one of the most complex IT platforms undertaken by the feds or the states,” Schuyler said.
Health care exchange still plagued by problems
employers that account for $61.2 billion in annual health care spending. Employers, however, pushed a larger percentage of the burden on to their workers, whose total health care costs jumped 9 percent in 2013, the data show. Employees’ share of health care expenses, which includes contributions to pay for premiums and out-of-pocket costs including co-payments and coinsurance, was $5,135 in 2013, up from $4,715 last year. Workers are expected to shoulder more of the burden in 2014, with their costs expected to rise about 9 percent, to $5,613. Aon Hewitt’s research shows that workers’ share of the overall health care premium now stands at 22 percent, up from 18.6 percent a decade ago. Within the past year, 47 percent of employers have raised deductibles and other out-of-pocket responsibilities for employees.