HSAHSAIndexContribution rules, calculated
Qualified expenses

When health insurance premiums are HSA-qualified

Apply the narrow premium exceptions for COBRA, unemployment coverage, long-term care, and Medicare-age coverage.

HSA rule
Ordinary health premiums are generally not qualified. Exceptions include eligible long-term care premiums, COBRA, health coverage while receiving unemployment compensation, and specified Medicare-age coverage.

Match the premium to an exception

Keep the coverage invoice, proof of payment, and evidence supporting the exception, such as a COBRA election or unemployment record. The exception applies to the premium category and qualifying period.

Medigap remains excluded

After age 65, HSA money can pay certain Medicare and other health coverage premiums, but not Medigap. Qualified long-term care premiums also have age-based tax limits.

Example and common mistake

A retiree pays COBRA and later an ordinary individual premium. COBRA can fit an exception; the later premium may not. Assuming every retiree or self-employed health premium is HSA-qualified is the mistake.

Name the premium exception

For every premium reimbursement, identify the statutory category: COBRA continuation coverage, health coverage while receiving unemployment compensation, qualified long-term-care insurance within the age-based limit, or eligible Medicare premiums after age 65. Preserve premium notices, payment records, and proof that the covered person met the exception during the payment period.

Ordinary individual-market and Medigap premiums generally do not become qualified merely because the owner is retired or self-employed. Split combined payments when only part qualifies. Keep the calculation with the HSA distribution record rather than relying on a bank statement that lists only an insurer name.

Questions to resolve

  • Which named statutory exception covers this premium?
  • Was the insured person eligible for that exception during the payment period?
  • Does a combined payment include an ineligible Medigap or individual-policy component?

Federal authority record

Next HSA decisions

Which Medicare premiums an HSA can payHSA planning when retiring before MedicareThe HSA qualified medical expense test