Health Insurance Premiums - paid through the Exchange

[anyahostetler]

Question for the community here regarding the treatment of health insurance premiums as a W-2 Employee -

*If you have health insurance through an employer, the portion of the premium that is paid for by the employee is (usually) taken through payroll as a pre-tax deduction to reduce AGI.

*If your employer does not offer health insurance and you must go purchase through the exchange, the premiums paid can only be taken in the medical expenses deduction IF you itemize and IF your medical expenses are > 10% AGI.

Is this correct? Seems unfair. Thanks for your help!

[WillK · Accepted solution]

Unfortunately that is correct.

If you have insurance through your employer and you pay for the premiums using pre-tax dollars you are not able to deduct them on your return since you are not paying taxes on the money used for the premiums.

If you are getting health insurance on your own you can deduct the medical premiums on your return if you are itemizing your deductions and all your medical expenses (premiums included) are more than 10% of your AGI.