We receive health insurance premium reimbursements through a HIPP program. Is this something we need to include on our taxes, if so where do we put it/

[MaryK1]

No, you do not have to include the reimbursements on your tax return.

[sotorobles]

Do you have a source for this?  I have the same question.  Thank you!

[MarilynG1]

If you are filing with Itemized Deductions, you can enter your health insurance premiums and the offset reimbursements in the Medical Expenses section.

If you are using the Standard Deduction, you don't need to enter the reimbursements.

Click this link for more info on Medical Insurance Reimbursements. 

[hulahoopman]

I would like to ask a further question on this. We too get health insurance premium reimbursements through a HIPP program. My employer deducts these premiums pre-tax from my paycheck as any employer provided health insurance would work, and then our state (NY) sends us a check for the full premium amount to reimburse us. Wouldn't we have to report this as income, since the premiums have already beeen deducted pre-tax from my paycheck? Otherwise, I'm getting two tax-breaks, one when the employer deducts the premiums pre-tax, and then again if in fact these insurance premium reimbursements are counted as non-taxable income. Know what I mean? 

[BrittanyS]

No, you are not required to report the HIPP reimbursement, nor the pre-tax health insurance premiums on your tax return.  

Health Insurance Premium Payments are not taxable as long as the payments meet the IRS guidelines for qualified medical expenses.  Health Insurance would be considered a qualified medical expense.  Therefore, it would not be entered on your income tax return.  

Per the IRS, "If an employer pays the cost of an accident or health insurance plan for his/her employees (including an employee's spouse and dependents), then the employer's payments are not wages and are not subject to social security, Medicare, and FUTA taxes, or federal income tax withholding. "  The pre-tax insurance falls in the category of a health insurance and is not considered income.  However, if paid by the employer the insurance premiums will not be deductible on your Schedule A for itemized deductions.

For more information, see the link below:

• Medical and Dental Expenses

@hulahoopman 

[hulahoopman]

Thanks Brittany, I do understand that pretax health insurance premiums do not get reported. (In this case, they are deducted directly from my paycheck pre-tax to pay for my share of health insurance offered by my employer.) I also understand that the employer's contribution is also not reported or considered income. However, the HIPP reimbursements I receive from the state are the full gross amount of my own paycheck's health insurance pre-tax deductions without taking into account that I'm already not paying taxes on that amount. Wouldn't I have to somehow reconcile that the HIPP amounts are reimbursing me for pre-tax dollars? Let me offer an example. Let's say someone gets health insurance where the premiums are paid directly to the insurance company via HIPP. The insured person is not involved in the transfer of this money. The HIPP payments are not reported and have no effect on their taxes whatsoever. Agreed on this so far? Now let's say that the insured person pays their portion of health insurance premiums through their employer via a pre-tax deduction and then receives HIPP payments directly for the amounts of their already pretaxed premiums. In this case, the insured is getting a tax deduction on the insurance premiums even though they have in effect not really paid for them. Wouldn't this have to be reconciled somehow? @BrittanyS 

[MonikaK1]

If you are paying the premium through your wages, and then being reimbursed directly, you would not need to pay tax on the reimbursement.

Please see IRS Publication 502 for more information about situations where you may or may not need to report excess reimbursement in your gross income (excerpt below):

Premiums paid by you.

If you pay either the entire premium for your medical insurance or all the costs of a plan similar to medical insurance and your insurance payments or other reimbursements are more than your total medical expenses for the year, you have excess reimbursement. Generally, you don't include the excess reimbursement in your gross income. However, gross income does include total payments in excess of $410 a day ($150,060 for 2024) for qualified long-term care services.

Premiums paid by you and your employer.

If both you and your employer contribute to your medical insurance plan and your employer's contributions aren't included in your gross income, you must include in your gross income the part of your excess reimbursement that is from your employer's contribution.

If you aren't covered by more than one policy, you can figure the amount of the excess reimbursement you must include in gross income using Worksheet B (included in Publication 502).

@hulahoopman