Question

Self employed health insurance premium after recent marriage

Forum|Forum|7 years ago
October 9, 2018
1 reply
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I am finally finishing my 2017 taxes, and have run into a snag.

My wife and I got married in July 2017. I am self-employed, and my wife works for an employer. We are currently preparing a joint return, but can file separately if more advantageous.
I pay my own health insurance, and have always taken the self-employed health insurance premium deduction.
When we got married, the least thing we were interested in right away was merging health insurance plans. In November 2017, during open enrollment, we looked into the option of adding me to my wife's plan. Unfortunately, it was more expensive, and they did not offer the doctors that I currently have, so I have continued on paying for my own insurance to present day. Only now do I read about some rule where if my wife has insurance through her work that I could join, I may not be able to claim my health insurance deduction? Is this true in every scenario?
I have serious medical issues, and switching to my wife's inferior work plan is NOT an option for me. Losing out on the significant deduction I get for my expensive premiums would be devastating. Do I understand correctly that I lose my self-employed health deduction completely, despite my wife's plan available through work being MORE expensive, and inferior?
If this is the case, when did my self-employed health deduction cease? When we got married in July? During open enrollment in Nov. when we investigated me joining her plan? I truly do not know if I was eligible to join prior to open enrollment.
Claiming the deduction on Schedule A instead provides no benefit, as my total expenses are not high enough, mainly because I pay for a very good health insurance plan with no deductible due to the fact that I (thought) I could deduct the entire premium.

Any help in this tricky situation would be GREATLY appreciated!

BarbL

Unfortunately, that is the case and I've not found exceptions which would apply in your situation. Per IRS rules, the deduction is not available for any calendar month in which you were eligible to participate in a subsidized health plan maintained by your employer (if you work as an employee in addition to being self-employed) or maintained by the employer of your spouse.

If audited, the IRS would most likely look to your wife's employer to see if they offer enrollment for life changes, such as marriage, outside of open season. Many do. If so, the eligibility date would be July unless there is a waiting period for those changes. Otherwise, it would be the open season dates.

My recommendation would be to discuss your specific situation directly with the IRS, and if they are unable or unwilling to help, contact a taxpayer advocate. (You must contact the IRS before using the taxpayer advocate service). I'm not sure if anything can be done, given the clear wording of the tax code on this issue, but it is worth a shot.

Your local taxpayer advocate can be found here: Taxpayer Advocate Service

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