EDUCATION CENTER
GTT RESOURCES: HEALTH INSURANCE AND HSAs

Traders face two problems when it comes to health insurance.

The first problem is that traders must arrange their own health insurance coverage in either their own trading business group or an individual-level plan. Learn about what choices are available to traders on our GTT Alliance for Traders page.

The second problem is that traders must do some tax planning and structuring in order to get tax-deductions for their health-insurance premiums and/or health savings account (HSA) contributions. By default, traders don't get adjusted gross income (AGI) deductions for either premiums or HSA contributions.

Trading gains are not considered "earned income," which is required as a basis for AGI tax deductions including health-insurance premiums (100 percent), HSAs, IRAs and other retirement-plan contributions. As indicated on our GTT trader entities page in our Tax Center, a trader can form an entity for their trading business and the entity can pay the trader an "administration fee," which is considered earned income. GTT offers many versions of this tax and insurance strategy, so a trader can wind up with either a group plan or individual-level plan – whichever is best suited to their needs.

After leaving jobs that provided health-insurance coverage in an employer's group plan, traders can either opt for limited COBRA coverage or arrange their own insurance. Click here to learn more about COBRA. The problem is that COBRA insurance may not be deductible, whereas a trader's own direct insurance is tax deductible, providing the trader uses a GTT entity strategy.

To learn more about health-insurance plans and HSAs, see our Alliance for Traders page.

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