Overview of Individual Health Insurance
Approximately 18 million Americans had individual health insurance policies in 2007. It is
esimated that 24 million Americans have individual policies today. If Health Care reform passes, it is expected that enrollment in individual health insurance plans would double (or triple) in the next year. Doing some basic math, you can assume that 36 - 48 millionAmericans may own individual health insurance policies one year from now.
Most Individuals Do Not Pay for Individual Health Insurance Tax-Free
Oddly, most individual policy holders pay their premium with after-tax dollars. This means most Americans pay 37-100% more for their coverage than if they paid it tax-free. Since 2001, the federal government has made numerous changes to the tax code to put individual health insurance policies on a level playing field with traditional employer-sponsored plans.
If you have an individual plan or sell individual health insurance, you should familiarize yourself with the following ways to pay for individual health insurance tax-free:
How to Pay for Individual Health Insurance Tax-Free If You Are Employed
How to Pay for Individual Health Insurance Tax-Free If You Are Self-EmployedDeduct your health insurance premium! You can claim the individual health insurance deduction as an "above the line" tax deduction on Form 1040, Line 29. See the IRS 1040 instructions for guidance.
How to Pay for Individual Health Insurance Tax-Free If You Are Unemployed
Contribute to a Health Savings Account (HSA)! You can use your HSA balance to pay for individual health insurance tax-free if you are receiving federal or state unemployment benefits.
Do you pay for your health insurance tax-free?