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tax question: Are premiums for a HDHP deductible?
Old 02-07-2010, 02:50 PM   #1
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tax question: Are premiums for a HDHP deductible?

Is the premium for a high deductible health plan (HDHP) deductible? From what I read:


Insurance Premiums

You can include in medical expenses insurance premiums you pay for policies that cover medical care. Medical care policies can provide payment for treatment that includes:
  • Hospitalization, surgical services, X-rays,
  • Prescription drugs and insulin,
  • Dental care,
  • Replacement of lost or damaged contact lenses, and
  • Long-term care (subject to additional limitations). See Qualified Long-Term Care Insurance Contracts under Long-Term Care, later
------

I know the medical expenses must satisfy the 7.5% of Gross Income threshold. But is the deductibility of HDHP/HSA premiums excluded?

Full IRS pub:

Publication 502 (2009), Medical and Dental Expenses
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Old 02-07-2010, 03:17 PM   #2
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So long as you pay them yourself with taxable $, they are deductible subject to the 7.5% threshold on Schedule A.
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Old 02-07-2010, 04:28 PM   #3
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Old 02-07-2010, 04:38 PM   #4
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Old 02-07-2010, 08:34 PM   #5
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Quote:
Originally Posted by FIRE'd@51 View Post
So long as you pay them yourself with taxable $, they are deductible subject to the 7.5% threshold on Schedule A.
Thx. I wasn't sure if HSA's were treated any differently.
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Old 02-07-2010, 09:04 PM   #6
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Yup, premiums for health insurance, whether or not an HSA plan, are deductible as described in pub 502. The senate version of the health care bill that has not passed was going to raise the threshold from 7.5% to 10%. ( political interjection: this was a very bad idea as already there is a huge disparity with employment related insurance tax benefits).
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Old 02-08-2010, 04:46 AM   #7
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Pay the premiums out of the HSA account to get the tax benefit as most people don't come close to hitting the 7.5% AGI threshold. Just my two cents.
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Old 02-08-2010, 08:47 AM   #8
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Pay the premiums out of the HSA account to get the tax benefit as most people don't come close to hitting the 7.5% AGI threshold. Just my two cents.
My understanding is that you can not pay health insurance premiums from an HSA unless you are on COBRA or collecting unemployment benefits.

If you can't pay premiums through an HSA or an employer's cafeteria plan, premiums are indeed subject to the 7.5% AGI threshold on Schedule A.
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Old 02-08-2010, 09:41 AM   #9
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My understanding is that you can not pay health insurance premiums from an HSA unless you are on COBRA or collecting unemployment benefits.

If you can't pay premiums through an HSA or an employer's cafeteria plan, premiums are indeed subject to the 7.5% AGI threshold on Schedule A.
You are correct, only COBRA premiums or on unemployment can use HSA money to pay premiums. The 7.5% threshhold is also correct for now unless you are self-employed.
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