Question

Health Insurance Premium Reimbursements Taxability

Forum|Forum|1 year ago
February 9, 2025
1 reply
0 views

Are health insurance premiums that are taken out of your paycheck on a pre-tax basis and are later reimbursed considered taxable income? I ask because I am considering applying for Medicaid, but because I currently am covered under my husband's employer provided coverage, the state would want to enroll me in a HIPP program that reimburses the health insurance premium. This seems like it would be taxable to me since it's originally not taxed when it's taken out of his pay and it's earned income.

Not A Product Question

S

SabrinaD2

Health insurance premiums taken out of your paycheck on a pre-tax basis aren't considered taxable income. However, if you receive reimbursement through the Health Insurance Premium Payment (HIPP) program, it may be taxable.

This is because the reimbursement is for an amount that wasn't initially taxed. The taxability depends on how the state classifies the reimbursement and whether it is paid directly to you or to the insurer

For specific guidance, it's best to consult a tax professional or refer to the IRS guidelines

B

Boombaby99Author

I don't see anything about Medicaid reimbursements on the IRS guidelines link you posted. It would be reimbursed to my husband, not the insurer. I understand that it may be taxable. That's why I'm asking this question on here lol But it looks like I would have to hire a tax attorney to even get a straight answer.

M

MonikaK1

To be clear, are you planning to sign up for Medicaid with a share of the cost of premiums? Medicaid premiums vary by state and income, and may also include cost-sharing requirements.

Reimbursement for premiums paid would not be taxable unless you already took a medical expense deduction on your tax return for the premiums.

If you have medical expenses that are reimbursed by a Health Reimbursement Arrangement (HRA), you can't include those expenses in your medical expenses.

See IRS Publication 502 for more information about the tax aspects of medical expenses.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"