The growing requirement for health insurance coverage has facilitated the uprise of numerous private insurance corporations with numerous premium schemes and coverage ranges. Unlike the public sector corporations, these companies do not set delimiting criteria for finalizing the eligible entities. Moreover, the option available for exempting the insurance premium tax makes the private companies much preferable than the public sector. Specific tax exemptions are available for the following insurance schemes.
Insurance granted under the employers’ scheme
The income-based insurance policy granted to employers is an exceptional choice to deduce the insurance premium tax from the taxable income. The individual insurance policy does not enable such an exemption in the federal tax. Under the employer insurance scheme, the complete annual expenses on healthcare, which exceeds the calculated annual income by 7.5 percent, can be deducted from the taxable amount.
Insurance granted for entrepreneurs
Entrepreneurs who maintain business ventures with the least liability are eligible for specific insurance policies. Such policies made exclusively available for entrepreneurs provide the benefit of tax exemption on insurance premiums. Under this policy, the healthcare costs are deducted from the tax returns of the entrepreneur.
Moreover, the benefit for tax deduction can be also extended to the nominees suggested by the entrepreneur. The nominees who avail the benefit of deduction can be the spouse or the family of the insuree. However, the tax deduction for the premium will be granted only if the gross income lies within the assigned range.
Insurance assigned under Medical savings
The policyholders who are eligible to maintain a health savings account are relinquished from tax obligations of the health insurance policies. The Internal Revenue Service has set forth the specific guidelines to maintain health savings account. As per the IRS norms, only those who are granted with the high-deductible policy are eligible to acquire a health savings account. The latest statutory law of the revenue service demands a minimum amount of deductible for the insurance policy, which is $2500 for a family.
All the healthcare expenses of a family can be covered from the Health Savings Account and the premium is completely exempted from tax obligations. The use of the account for purposes other than healthcare issues will bring huge financial liability and legal punishments to the malefactor.
These insurance schemes are particularly formulated to enable those with financial liabilities to reduce their strain on insurance tax returns. Opt for any of these schemes and you can save your income from redundant tax returns.