What insurance premiums can be paid with HSA funds?

Asked by: Ayana Bartoletti  |  Last update: October 1, 2025
Score: 4.8/5 (4 votes)

You can use your HSA to pay for premiums on long term care insurance, COBRA (health insurance you might use if you become unemployed), and even Medicare if you are age 65 or older.

Can HSA pay for insurance premiums?

The IRS does not allow you to use your HSA to pay for regular health insurance premiums, but there is an exception for unemployed individuals. If you lose your job, you may qualify to withdraw funds from your HSA to cover your health insurance premiums.

Can I use my HSA to pay health insurance premiums if I retire early?

If you pay for your medical expenses out of pocket now, you'll have more saved in your HSA account to help pay for medical expenses once you retire. If you retire before age 65 and you aren't yet eligible for Medicare, you can use money in your HSA to pay your medical coverage premiums.

Can I use my HSA to pay for Medicare premiums?

The good news: You can keep using your HSA funds

You can even use your HSA to pay for some Medicare expenses including your Medicare Part B, Part D and Medicare Advantage plan premiums, deductibles, copays and coinsurance.

Can I pay my cobra premiums with HSA?

Can you use HSA for COBRA premiums? The short answer is yes. You can use funds from your Health Savings Account (HSA) to pay for COBRA premiums. This option is particularly beneficial for individuals who want to maintain their health insurance coverage but face the financial burden of COBRA premiums.

3 Ways Your HSA Can Pay Insurance Premiums

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Can you pay long term care premiums with HSA?

Consumers can also use their HSAs to pay for long-term care insurance premiums. There are dollar limits on qualified premiums on based on age. Here was the breakdown for 2022: Age 40 or under — up to $450.

Can HSA pay for gym membership?

Gym memberships. While some companies and private insurers may offer discounts on gym memberships, you generally can't use your FSA or HSA account to pay for gym or health club memberships. An exception to that rule would be if your doctor deems fitness medically necessary for your recovery or treatment.

What is the 6 month rule for Medicare and HSA?

If you have a Health Savings Account (HSA), you and your employer should stop contributing to your HSA 6 months before you retire or apply for benefits from Social Security (or the Railroad Retirement Board). This will ensure you avoid a tax penalty.

Can HSA be used for dental?

Yes, you can use a health savings account (HSA) or flexible spending account (FSA) for dental expenses.

Why is Social Security no longer paying Medicare Part B?

There could be several reasons why Social Security stopped withholding your Medicare Part B premium. One common reason is that your income has exceeded the threshold for premium assistance. Another reason could be that there was a mistake or error in your records.

What is the downside of an HSA?

Drawbacks of HSAs include tax penalties for nonmedical expenses before age 65, and contributions made to the HSA within six months of applying for Social Security benefits may be subject to penalties. HSAs have fewer limitations and more tax advantages than flexible spending accounts (FSAs).

How do people who retire early have health insurance?

If you retire before you're 65 and lose your job-based health plan when you do, you can use the Health Insurance Marketplace ® to buy a plan.

What can I use my HSA for Blue Cross Blue Shield?

Eligible expenses include:
  • Doctor and hospital visits.
  • Copays and coinsurance.
  • Prescriptions.
  • Some over-the-counter medications like pain relievers, allergy relief, cough suppressants, etc.
  • Feminine hygiene products.
  • Dental and vision care, including prescription eyeglasses.
  • Health insurance or medical expenses if unemployed.

What is the 12 month rule for HSA?

It means you must remain eligible for the HSA until December 31 of the following year. The only exceptions are death or disability. If you violate the testing period requirement, your ineligible contributions become taxable income.

Can I use HSA for glasses?

Yes! You can definitely use funds from your flexible spending account (FSA) or health savings account (HSA) to purchase prescription glasses. (FSAs and HSAs can be used for many other vision- and eye health-related expenses, too, but we'll discuss that more in a bit.)

What is the penalty for HSA contributions while on Medicare?

If you or any other authorized party, like an employer, make excess contributions to your HSA once you have Medicare, you can be charged a 6% Internal Revenue Service tax penalty on those funds and any interest they accrue until the funds are removed from your account.

Can HSA be used for premiums?

You generally can't use HSA funds to pay premiums. Once you turn 65, you can use the money in your HSA for anything you want. If you don't use it for qualified medical expenses, it counts as income when you file your taxes. Six months before you retire or get Medicare benefits, you must stop contributing to your HSA.

Are vitamins HSA eligible?

In general, vitamins are not considered an HSA eligible expense unless they are prescribed by a doctor for a specific medical condition. For example, if your doctor prescribes prenatal vitamins during pregnancy or recommends vitamin D supplements to treat a deficiency, those could be eligible expenses under your HSA.

Are electric toothbrushes HSA eligible?

Routine electric toothbrushes for general oral hygiene are usually not eligible.

What is the HSA account loophole?

The ultimate loophole available to almost everyone under the age of 65 in our tax code is the Health Savings Account (HSA). It is the only account you can contribute to and deduct the contribution and then withdraw the money tax free. Think about that, a tax deduction going in and no taxes going out.

What Medicare premiums can be paid from HSA?

You can use your HSA funds to pay for qualified medical expenses, which include: Medicare Part B, C, and D premiums. Medicare copayments and deductibles. Out-of-pocket medical expenses.

Are HSA withdrawals tax-free after 65?

At age 65, you can take penalty-free distributions from the HSA for any reason. However, in order to be both tax-free and penalty-free the distribution must be for a qualified medical expense. Withdrawals made for other purposes will be subject to ordinary income taxes.

Is an Apple Watch HSA eligible?

Even though Fitbits and Apple Watches measure important health data, they currently do not qualify for HSA reimbursement, as they are considered for general health use and not intended to treat or manage a specific medical condition.

Can I use HSA for groceries?

As mentioned earlier, using HSA funds directly for groceries is not allowed under current IRS regulations. This can be seen as a downside for individuals looking to use their HSA money for day-to-day expenses.