Because you deducted your prior year health insurance premiums as a self-employed person, I'd include this rebate as income on line 21 (other income). I'm sure it does not go on schedule C, as it was never deducted there.

From a bottom line perspective, you get exactly the same result if you include it on line 21 or if you deduct it from the current year premiums. I simply prefer the better disclosure to the IRS of the rebate by putting it on line 21.

--Peter

PS - For lurkers, you get a somewhat different answer if you are not self employed. I'd still put it on line 21, but only to the extent you were able to deduct the premium on Schedule A in a prior year.