Self-employed Health Insurance

[JRMOSELEY]

My wife took the voluntary separation package from her employer in 2021.  She took advantage of COBRA for her health insurance that was supplemented by said employer through 08/2021.  In 09/2021 she became an independent consultant and began is contracting with another entity.  She continues with COBRA and is paying the full premium.  My question: Does the COBRA coverage she has qualify for a self-employed health insurance deduction. 

[Opus 17]

No, COBRA is still an employer sponsored plan even if she is paying the full amount.  (She benefits from the negotiating power of being in the employer's group, for one thing.). To claim the SE health insurance deduction, the policy must be in her own name or her business name.  

Her COBRA premiums are deductible as schedule A itemized medical expenses, subject to the 7.5% rule and other schedule A rules.  You will have to do a calculation as to whether it would be better to keep the COBRA or get a marketplace plan with maybe higher premiums but eligible for the SE deduction. 

[AmeliesUncle]

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@Opus 17 wrote:

No, COBRA is still an employer sponsored plan even if she is paying the full amount.

  To claim the SE health insurance deduction, the policy must be in her own name or her business name.  

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The law says an employer SUBSIDIZED plan would disqualify it.  It sounds like this insurance is not "subsidized".

Circumstances may vary and there is room for interpretation what "plan" means, but I've seen where the insurance company sends a bill to the person, and the person makes the payment to the insurance company.  I certainly feel it is likely that situation qualifies.

[VolvoGirl]

Self-employed health insurance policies must be in the name of the business.  Sole Proprietors can meet this requirement if the policy is in their name.  COBRA policies are in the name of the former employer and do not qualify for the self employment health insurance deduction.

This says COBRA goes on Schedule A

https://ttlc.intuit.com/community/entering-importing/help/where-do-i-enter-my-health-insurance-premi...