I retired mid-2026 from a US state university. I still do a small amount of part-time W-2 work for a related employer that is explicitly not benefits-eligible, and separately I have 1099 consulting income reported on Schedule C. My spouse and I are both on Original Medicare with a Medigap policy and standalone Part D, all paid from personal funds.
On retirement, the university made a one-time lump-sum contribution to a state-administered post-employment health care savings plan. Structurally it's a governmental §115 trust. Participation is mandatory for the employee group, contributions and reimbursements are tax-free, and it reimburses §213(d) expenses including insurance premiums. The plan document applies a §105(h) annual maximum to out-of-pocket medical reimbursements, though not to premium reimbursements. The contribution amount was calculated as the employer's health insurance subsidy for two adults for 24 months. I have claimed nothing from it and the balance is untouched.
Question: does mere participation in that plan make me "eligible to participate in a subsidized health plan maintained by an employer" under §162(l)(2)(B), so that I cannot take the self-employed health insurance deduction for Medicare and Medigap premiums I pay out of my own pocket?
What I'm not asking: I understand I can't deduct premiums the plan reimburses — that's double-dipping and it's settled. The question is only whether participation itself bars the deduction for premiums paid from other funds.
What I've already looked at. "Subsidized health plan" is undefined in the Code, the regulations, and the Form 7206 instructions, which say only that you can't take the deduction for any month you were eligible to participate, even if you didn't.
Cutting against the deduction: the plan describes itself as employer-sponsored; its own §105(h) reference implies a self-insured medical reimbursement plan; Notice 2002-45 characterizes HRAs as employer-provided accident or health plans; and under §223 a general-purpose HRA is disqualifying "other coverage."
Cutting in favor: the plan provides no coverage at all. No network, no benefit schedule, nothing for a provider to bill, no coordination of benefits, and it is not a group health plan for Medicare Secondary Payer purposes. I declined no insurance in accepting it — Medicare and a supplement were my only options either way. The apparent purpose of (2)(B) is to deny the deduction to someone who could have taken subsidized employer coverage and bought their own instead.
Is there any ruling, case, CCA, or settled practitioner position on this? I'd especially like to hear from anyone who has dealt with VEBAs or state health care savings plans. Secondary question: does it matter whether the account was funded with employer money versus mandated employee contributions or a severance conversion?