1) If you were an employee in a corporation with a cafeteria plan, you could take 100% of the cost before taxes - that means, the $3,000 you pay would not be taxed for Federal or State income taxes. It would not be taxed for Social Security or Medicare. Nor would it be subject to any of the local taxes. For an average person, in an average state, earning about $40,000, that means a tax benefit of over $1,200 (over 40% total taxes).

2) If you own a C-Corporation, and made this insurance benefit available to all your employees, you would also get the same tax savings - in addition to saving about 10% on the employer's share of the payroll taxes and related costs. That same $3,000 of the owners' health insurance saves them about $1,500. (They don't have to pay their income taxes, local taxes or Workers Compensation insurance on that money. AND they save both the employer's and employee's share of SS/Medi.)

3) Being self employed, that same $3,000 worth of insurance cost gets you a deduction of $1,800 (60%) - which, in the same average tax bracket mentioned before - only saves you about $575!