As the cost of employer-sponsored health insurance rises, many individuals and families are purchasing individual health insurance policies directly from an insurance company. Unfortunately, many individuals and families with individual health insurance policies do not take advantage of the enormous tax-advantages available to them. By taking advantage of tax free individual health insurance, individuals and families can usually save 20-40% of their health insurance premiums in taxes.
Most individuals and families simply accept these taxes as a part of life, but most individual health insurance policies can be paid with pre-tax dollars.
If you are employed, you can only take advantage of tax free individual health insurance if your employer offers a section 125 POP plan. Under these plans, employees are able to reimburse themselves for individual health insurance premiums tax free. This has only been possible since 2009 due to the new Section 125 regulations for cafeteria plans. See www.zanebenefits.com/employee for an example of how this works for an individual health insurance plan.
Self-employed individuals can take advantage of tax free individual health insurance on their end of year tax return. If you are self-employed, you can deduct the premium cost from your taxes on Form 1040.
If you are unemployed, you may be able to take advantage of tax free individual health insurance if you have an Health Savings Account (HSA). Under special circumstances, HSA money can be used to pay for individual health insurance tax-free.
Due to the increasing costs of employer-sponsored health insurance, many employers no longer offer health benefits. New regulations have been created to help reduce the cost of insurance by allowing tax free individual health insurance to be offered as a benefit. Today, employers can set up a section 125 POP to help employees pay for their individual health insurance tax free. With a Section 125 POP plan, the employer does contribute money toward employees' individual plans. As a result, a company can offer a section 125 POP plan at zero cost to the company while saving money by reducing its FICA tax liability.
Insurance agents can help an employer set up a Section 125 POP plan and then help each employee purchase any qualified individual health insurance plan tax free.
Learn more about tax free individual health insurance in your state at www.zanebenefits.com.
