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SF 722

Subtraction provision for health insurance premiums

2025-2026 Regular Session Introduced by Rich Draheim and 2 co-sponsors

Allows Minnesota taxpayers to subtract health insurance premiums from state taxable income, reducing costs for those with out-of-pocket coverage but decreasing state tax revenue.

Author stricken Eichorn
#insurance-health #taxation #taxation-income
0
WeVote Research Nonpartisan
Bill Summary · SF 722

Legislative bill overview

SF 722 proposes to allow taxpayers to subtract health insurance premiums paid directly from their state taxable income, similar to a deduction. This would apply to premiums for individual or family health insurance coverage purchased by Minnesota residents. The bill aims to provide tax relief for those paying out-of-pocket for health insurance.

Why is this important

Health insurance costs represent a significant expense for many Minnesota families, particularly self-employed individuals and those without employer-sponsored coverage. A tax subtraction would reduce the effective cost of insurance premiums and could increase health insurance coverage rates by making insurance more affordable. This is particularly relevant in states without federal deductions for self-employed health insurance premiums beyond current federal law.

Potential points of contention

  • Revenue impact: Subtracting premiums from taxable income reduces state tax collections; the fiscal cost would need to be offset or funded elsewhere
  • Equity concerns: The benefit primarily helps higher-income earners in higher tax brackets, while lower-income individuals may benefit less or not qualify
  • Scope ambiguity: The bill's language doesn't clarify whether it covers all insurance types, subsidized premiums, or employer contributions, creating implementation questions
  • Federal redundancy: Federal tax code already provides deductions for self-employed health insurance; unclear if this duplicates existing benefits

Compiled from official sources — confirm details with the bill’s official record.

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