SE Health and subsidized plan

[Kram BergGold]

Non self employed spouse has health insurance from a W-2 job. It is subsidized. There are two possible scenarios for the self employed spouse who is eligible to join the plan. Scenario one, if the self employed person joins the plan the company will pay some of the cost. In this case the self employed person who forgoes coverage can not claim SE health. Scenario 2, 100% of the premiums would be paid by the self employed spouse if he or she joins the plan. If he or she decides to forego the company plan and buy health insurance, is it deductible because the plan is not subsidized?

[ChEAr$]

Non self employed spouse has health insurance from a W-2 job. It is subsidized. There are two possible scenarios for the self employed spouse who is eligible to join the plan. Scenario one, if the self employed person joins the plan the company will pay some of the cost. In this case the self employed person who forgoes coverage can not claim SE health. Scenario 2, 100% of the premiums would be paid by the self employed spouse if he or she joins the plan. If he or she decides to forego the company plan and buy health insurance, is it deductible because the plan is not subsidized?

Scenario 2 is confusing. 100% of which premiums? For the spouses share of her plan or for a whole different policy?
All things considered, you'll probably find scenario is better even if he can't deduct any premiums above the line.

[Kram BergGold]

Scenario 2

In scernario 2, there is no subsidy for the extra amount paid to cover the self employed spouse.
Only the W-2 employee spouse's insurance is subsidized.

[Bees Knees]

TTB page 5-11 says:

Do not include any amount paid for any month or
part of month in which the taxpayer was eligible to
participate in a subsidized health plan maintained by
the taxpayer’s employer or spouse’s employer.

That implies being eligible but not participating in the plan will disqualify the Self-employed health insurance deduction.

That agrees with From 1040 instructions, page 32 which says:

But if you were also eligible to participate in any subsidized health plan maintained by your or your spouse's employer for any month or part of a month in 2012, amounts paid for health insurance coverage for that month cannot be used to figure the deduction. Also, if you were eligible for any month or part of a month to participate in any subsidized health plan maintained by the employer of either your dependent or your child who was under age 27 at the end of 2012, do not use amounts paid for coverage for that month to figure the deduction.
Example. If you were eligible to participate in a subsidized health plan maintained by your spouse's employer from September 30 through December 31, you cannot use amounts paid for health insurance coverage for September through December to figure your deduction.

Again the term eligible to participate is used.

Another point to keep in mind is that participating in a subsidized health plan maintained by an employer does not mean the employer has to actually kick in some of the money. The employee or spouse could pay 100% of the cost, but it is still considered subsidized because it is through and employer plan. Employer plans are group plans that are cheaper on an individual basis than if the individual went out on his or her own to buy an individual policy. That is why people choose to pay 100% of the cost of insurance under COBRA, because staying on their former employers plan, even though you pay 100% of the cost, is still cheaper than going out and buying your own individual coverage.

So technically in your scenario #2, yes there is a subsidy due to the fact that the insurance is being purchased through the employer's group health insurance plan.

Of course, another issue is paying for insurance through your spouse's employer is not buying insurance established by the self-employed business, which is another requirement for taking the self-employed health insurance deduction.