Are Health Insurance Premiums Tax-Deductible? Everything You Need to Know for 2025

Understanding taxes is complicated enough, but throw in medical expenses, and suddenly you’re spiraling through IRS forms and government jargon. One of the most commonly asked questions during tax season is this: Are health insurance premiums tax deductible? It’s a valid concern, especially in an age where health insurance costs continue to rise.

Let’s break it down, so you’ll walk away with clear answers and maybe even save some money come tax time.

What Does “Tax Deductible” Really Mean?

Before we dive into whether health insurance premiums are tax deductible, let’s talk about what a tax deduction actually is.

A tax deduction lowers your taxable income, which means you might owe less in taxes or get a bigger refund. Not all expenses qualify, but certain medical-related costs, including insurance premiums, might.

Are Health Insurance Premiums Tax Deductible for Individuals?

The short answer: It depends.

If you are self-employed, yes—in most cases, your health insurance premiums are 100% tax deductible, even if you don’t itemize your deductions. This includes premiums for:

• Medical

• Dental

• Vision

• Long-term care

This deduction applies to you, your spouse, and dependents. However, the coverage must be established under your business, and you can’t claim the deduction if you were eligible for an employer-sponsored plan.

If you’re not self-employed, things get trickier. You can deduct unreimbursed medical expenses (including insurance premiums), but only the portion that exceeds 7.5% of your adjusted gross income (AGI)—and you must itemize deductions rather than take the standard deduction.

So, to answer again: Are health insurance premiums tax deductible? Yes, but only under specific conditions.

Employer-Sponsored Plans and Pre-Tax Premiums

If you have health insurance through your job, there’s good news: Your premiums may already be deducted pre-tax.

That means you’re already receiving a tax benefit by reducing your taxable income upfront. However, since those premiums are paid pre-tax, you can’t deduct them again on your tax return.

It’s a “one-and-done” benefit—you either deduct it once before taxes or claim it during filing, but not both.

Are COBRA and Marketplace Premiums Tax Deductible?

Let’s say you’ve recently left a job and are now paying for COBRA or a plan through the HealthCare.gov Marketplace.

Good news: These premiums are usually tax deductible—if you meet the medical expense deduction criteria (again, they must exceed 7.5% of your AGI).

Marketplace enrollees can also qualify for premium tax credits, which help lower your monthly insurance cost directly.

Health Savings Accounts (HSAs) and Premium Deductions

If you contribute to a Health Savings Account (HSA), those contributions are tax-deductible, and withdrawals used for qualified medical expenses are tax-free.

But here’s the twist: You generally can’t use HSA funds to pay for health insurance premiums—except in specific cases like:

• COBRA coverage

• Long-term care insurance

• Unemployment-related coverage

So while HSAs are amazing for tax advantages, they don’t solve the “are health insurance premiums tax deductible” dilemma in most scenarios.

State vs Federal Deductions

Some states allow you to deduct medical expenses even if you don’t itemize at the federal level. This means you could still benefit from deducting premiums on your state return, depending on where you live.

Always check with a licensed tax professional or your state’s Department of Revenue for the latest info.

Quick Checklist: When Can You Deduct Health Insurance Premiums?

✅ You’re self-employed and not eligible for an employer plan
✅ Your medical expenses (including premiums) exceed 7.5% of your AGI, and you itemize
✅ You’re paying for COBRA or marketplace insurance and qualify
✅ You use HSA funds for specific premium types (like COBRA)

Tips to Maximize Your Tax Benefits

• Keep receipts and documentation of all medical-related expenses

• Track your AGI to know if you’ll meet the 7.5% threshold

• Consider itemizing if your total deductions exceed the standard deduction

• Consult a CPA or tax advisor to get tailored advice

Final Verdict: Are Health Insurance Premiums Tax-Deductible in 2025?

Yes—but not for everyone. Whether you’re a freelancer, a W-2 employee, or somewhere in between, the ability to deduct your premiums depends heavily on your employment status, income level, and how you pay for insurance.

Understanding these rules empowers you to make smarter financial decisions, and maybe even squeeze a little more out of your tax return this year.