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COBRA Premiums and Self-Employed Health Insurance

Posted on 06/30/2025 ← Back to TaxBert's Tax Talk
If a taxpayer pays COBRA premiums, do those count for self-employed health insurance deduction?

COBRA premiums can qualify for the self-employed health insurance deduction, provided the taxpayer meets the general eligibility requirements and is not eligible to participate in a subsidized employer health plan [1].

Key requirements:

  • Must have net profit from self-employment [1]
  • Cannot be eligible for a subsidized health plan from an employer or spouse's employer during the months claiming the deduction [1]

The deduction is limited to the lesser of:

  • The eligible health insurance premiums paid, or
  • Net profit from the business reduced by the deductible portion of self-employment tax and any self-employed retirement plan contributions [2]
is COBRA considered participation in employer health plan?

Yes, COBRA coverage is considered participation in an employer health plan. COBRA allows former employees to continue their group health benefits from their previous employer's plan for a limited time after certain qualifying events like job loss or reduction in hours [1].

While participants typically must pay up to 102% of the premium cost, the benefits received under COBRA are still considered employer-provided health coverage and are excluded from income [1].

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