I would like to continue paying for health insurance with pre-tax dollars. But, according to this Washington Post article, buying healthcare through the Affordable Care Act (Obamacare) requires post-tax dollars.

Is the article accurate, or can I continue to use pre-tax dollars to pay for health insurance?

  • 4
    Even before Obamacare, you could only deduct medical expenses (including health insurance premiums purchased on the individual market) to the extent they exceeded 7.5% (10% in 2013–) of your income, unless you were self-employed and could deduct it as a business expense.
    – Craig W
    Commented Nov 13, 2013 at 2:17
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    Health insurance premiums for self-employed people are not a business expense deductible on Schedule C (where they would reduce taxable income) but are deducted on Form 1040 (Line 29) instead of Schedule A where they would be subject to the 10% threshold. (Premiums for other employees of the business are deductible on Schedule C as a business expense). Medicare premiums are also deductible on Line 29 even though they are not directly related to the business. At least, this was the law for 2012; I haven't checked whether the Medicare provision has been removed for 2013 and later years. Commented Nov 14, 2013 at 15:20
  • @DilipSarwate Am I misunderstanding this link?
    – Craig W
    Commented Nov 14, 2013 at 15:48
  • 1
    The tax situation is regarding health care, unrelated to ACA, so you might reword the question if you wish. Commented Nov 15, 2013 at 3:37
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    Kevin, claiming that your employer dropped your coverage because of this law is a political statement, since factually it is not true. Also, from your question it might appear that the Washington Post article suggested that only premiums for insurance bought through the ACA exchanges is post-tax, which is again incorrect and sourced in a political bias.
    – littleadv
    Commented Nov 15, 2013 at 7:03

1 Answer 1


As others have pointed out, post-tax dollars are what you'll use. Just as a quick note, as you'll be using post-tax dollars; in the past, I've refused to take contractor plans because they almost always are inferior to what I've been able to get off the private exchange ehealthinsurance. A few people have written excellent articles on Get Rich Slowly here and here about them in detail if you want more information.

Generally, contractors (and sometimes employees) are offered a few plans (3-4), and this health exchange gives you a little more freedom to pick your plan, which in your situation may help. It isn't always cheaper, but depending on your needs, you may obtain a better deal.

Forgot to add this: this option has also made switching jobs easy as well since I don't have to pay COBRA. While it depends on the situation, this can sometimes come out significantly cheaper. For instance, if I were to take the employer health plan next year, I would lose ~$450 a month, whereas the private exchange option is ~$300. But, if I were to switch jobs, decide to opt for self-employment, or a layoff, the COBRA would be even higher than ~$450.


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