Final answer:
Self-employed clergy can deduct health care coverage costs paid for B) themselves and their immediate family, which aligns with the typical structure of health insurance policies, including deductibles and HMOs.
Step-by-step explanation:
Self-employed clergy, like all self-employed taxpayers, are entitled to deduct health care coverage amounts paid for medical and dental insurance as well as long-term care. These deductions can apply to the coverage costs for not just themselves, but also for their immediate family.
Therefore, the correct answer is B. Themselves and their immediate family. This includes the taxpayer's spouse, dependents, and any children under 27 years old as of the end of the tax year. It is important to note, however, that the deduction does not extend to the congregation members or non-immediate family employees.
The concept of health care deductibles is important for understanding the mechanics of these insurance policies. A deductible is an amount that policyholders must pay out of pocket before insurance coverage pays anything. This, along with fee-for-service arrangements and health maintenance organizations (HMOs), forms the basis of how health insurance policies and payments are structured in the United States.