Tax Treatment and Health Insurance

Flashcards about tax treatment and health insurance policies.

Tax Deduction for Self-Employed Health Insurance

Self-employed individuals can deduct health insurance premiums if they have a net profit from their business and are not covered by a group policy.

Partnership Health Insurance Premiums

For partnerships, health insurance premiums are deductible for the partnership but are considered income to the partners; benefits are not taxable.

Health Savings Account (HSA)

An individually owned medical expense savings account where contributions are tax-deductible and withdrawals for qualified medical expenses are tax-free. Requires a high-deductible health plan.

Health Reimbursement Account (HRA)

An employer-established account where contributions are pre-tax, and employees can use the money to pay for deductibles, coinsurance, and co-payments. HDHP not required. Money rolls over from year to year.

Flexible Spending Arrangement (FSA)

An arrangement where an employee authorizes the employer to reduce their salary and put the money into an FSA account. Withdrawals are not taxed but are limited to certain approved benefits. Operates on a 'use it or lose it' basis.