I understand that self-employed individuals are not able to deduct health insurance premiums in a given month if they or their spouse are eligible to participate in an employer sponsored health plan. Is eligibility based on hours worked? Or the ability to enroll (such as during open enrollment)?
My husband is recently self-employed and we have since purchased our own individual health insurance. I have worked part-time for several years. I recently learned that employees who work 28 hrs/wk are eligible for coverage at my company. My hours fluctuate each month and are not guaranteed. Historically, I've worked 25 or fewer hours per week, but some weeks I may work more than 28 hrs. We're trying to determine if we can make a deduction for a given month.
To determine if we are able to deduct our health insurance premiums in a given month, would it be based on me working fewer than 28 hrs/wk in that month? If I work more than 28 hrs/wk in that month, are we precluded from taking the deduction for that month?
Monthly eligibility seems ambiguous. Even if I became eligible by number of hours worked in a given month, I am unable to sign up for the plan until open enrollment. And even then, I may not have the hours to support continued coverage. I have not been able to find any specific IRS guidance for our situation.
Any advice would be appreciated. Thank you!
First item, no - "Eligibility" begins when "open enrollment" begins.
Second item, yes, it is completely ambiguous...
If you are self-employed, you may be eligible to deduct premiums that you pay for medical, dental and qualifying long-term care insurance coverage for yourself, your spouse and your dependents. Unlike an itemized deduction, this deduction treatment is beneficial because it lowers your adjusted gross income (AGI).
Basically, it appears as thought you've never "qualified" for the employers' health care due to the hours per week that you work. This, regardless, hold no bearing as the IRS states that you are covered under your "husband's plan". I hope that makes sense.
Thank you so much for the insight! Per my employer, an employee needs to work 28 hrs/wk to be considered a full-time, eligible employee. The key here seems to be the commitment to work full-time, i.e. a consistent minimum of 28 hrs/wk week after week, month after month. For nearly six years now, I have generally worked a part-time schedule (less than 25 hrs/wk). While I have occasionally worked more than 28 hrs/wk, I generally have not and have not committed to doing so.
The conclusion here seems to be that my husband and I should be fine to take the self employed health insurance deduction for now. He is solely doing self-employed work now, and I am not eligible for my employer's health plan. If my level of commitment to my work changes, we can re-assess.
I really appreciate your help! Thank you.
Thank you for the response! Between your response and the next one I received, I do agree - I do not meet the eligibility requirements for my employer's plan. While I have occasionally worked more than 28 hrs/wk (full-time hours), I have not made the commitment to do so and generally/historically have not worked these hours. I would not be eligible to sign up for the plan during open enrollment unless I make the commitment to work full-time (which I haven't done).
Thank you for taking the time to respond! I really appreciate it.