Is Health Insurance Exempt From Federal Tax? 
No , not exempt as such . Whether you get your health insurance through an employer based plan or whether you are self-employed and purchase your own individual health insurance can have tax implications for you though . Generally , in today 's employer based insurance environment the employee is paying some portion of their individual and/or dependent health insurance premiums . And , in most such cases the employer is taking your share of the premium out of your paycheck on a pre-tax basis under a Section 125 Plan . The employee is receiving a tax advantage in this context as their share of their premium is taken out of paycheck on a pre-tax basis thus reducing their taxable net income and reducing the amount they pay in taxes . For the self-employed this issue gets more complex and you should seek the advice of a CPA or tax attorney . Health insurance premiums a self-employed person can be deducted or expensed depending upon how your business is structured and what your individual situation is . As is always the case when we 're talking about taxes it 's more complicated than the very simplistic answer that I have given and that is why you should seek professional advice on this matter . 