1099-misc form. However 60% of that income was due to my after tax premium payments and hence only 40% of the medical insurance benefits reported are taxable. How adjust?

Please clarify, did you report this as personal income on your 1040 or as Self-Employment on your Schedule C? 

If personal, first enter the 1099-MISC

next go to 

Income

scroll to the last option "Less Common Income"

scroll down to the last option there "Miscellaneous Income, 1099-A, 1099-C" START 

scroll down to the last option there "Other reportable income" START 

Answer "Yes" to start the interview

Type something like "Tax-free portion of medical leave" as the description and the amount as a negative amount. 

The adjustment to income will show on your Schedule 1 line 8z and carry over to your 1040.