I believe the pre-tax post-tax thing is actually wrong. The difference is that you pay for the plan with post-tax money until tax season rolls around, when if I remember correctly (from having an individual plan for several years) you get to deduct those costs.
So really, it's just the typical American thing of people being terrible at understanding tax codes and adjusting their withholdings correctly.
>You may deduct only the amount of your total medical expenses that exceed 7.5% of your adjusted gross income. You figure the amount you're allowed to deduct on Form 1040, Schedule A.
It’s another subsidy for big business in the US. If you work for a small employer that doesn’t offer health insurance, you’re paying with after tax money.
My reading of this [1] seems to match up with what I said:
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- If you buy health insurance through the state- or federally run health insurance marketplaces, you can deduct only the portion of the premium you pay out of your own pocket. You cannot deduct the amount of any subsidy.
- If you buy an individual or family health insurance plan, either on the open market or through a marketplace, and you pay all of the cost out of pocket, then the whole amount is deductible.
So really, it's just the typical American thing of people being terrible at understanding tax codes and adjusting their withholdings correctly.