Whether you have health insurance through your work or on your own, individually or through your employer, you typically must pay annual premiums for your policy. However, your premiums can be tax deductible, or you might be eligible to take other tax credits to lower your outgoings and improve your health insurance costs. For example, if you are in the business of sponsoring sports teams or health clubs, you can claim a tax credit for expenses that directly relate to providing health services to athletes, and if you have a college student health insurance plan, you could claim a tax credit for the cost of taking out such a plan for a student.
Your health insurance coverage is most valuable if it covers unexpected events like accidents and serious illnesses. If you have a major illness that forces you to miss work for a few weeks, you can forfeit a portion of your annual premiums - called a penalty for non-payment - until you have made a complete payment. And if you have a major accident that puts you out of work for months or even a year, you lose the privilege of claiming any tax credit for those missed payments. Likewise, if you are forced to use less than the full amount of your coverage you will forfeit part of your annual premiums until you return to the level that you paid for when you first purchased the coverage. Similarly, if your employer denies your request to extend your coverage, and if you cannot afford to pay more than the minimum required by the policy, you lose the tax-deductibility benefit the policy offers you.
Yet another tax deduction that might help you lower your health insurance premiums is the Alternative Minimum Health Insurance Credit (AMIC). You may also qualify for further credits if you participate in Medicare Part B or Medicaid, if you are unemployed, if you are a child or a disabled person and if you rent your home. To see if you qualify for any of these benefits, contact your tax adviser. You may also check with the Health Insurance Portability and Accountability Act (HIPAA) to find out about additional health insurance benefits you may be eligible for.