HSA Reimbursement For Insurance Premiums

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  • #1621
    Mr. Snickers
    Participant

    I will be turning 65 next April and enrolling in Medicare. I am a retired Federal annuitant. My health plan through Federal Employee Health Plan (FEHB) is a HDHP with HSA. I know I can be reimbursed for Medicare A, B, and D premiums from my HSA. I am looking for verification that my share of the premiums for my FEHB plan, as a retiree over 65, can be reimbursed from my HSA.
    I researched Pub 969 year 2017. On page 8 under insurance premiums, #4 Medicare and other health care coverage if you were 65 and older,(except for premiums for Medigap, etc.). This did not answer my question specifically.
    So, I researched Internal Revenue Bulletin 2004-33. Question #43. It seems to answer yes to my question. I look forward to your opinion or verification if this research is correct.
    Thank you

    #1707
    Mr. Snickers
    Participant

    Does anyone have a comment on my above post?

    #1714
    kaneohe
    Participant

    Pub. 969
    Insurance premiums. You can’t treat insurance premiums
    as qualified medical expenses unless the premiums
    are for:
    ………………………..
    4. Medicare and other health care coverage if you were
    65 or older
    (other than premiums for a Medicare supplemental
    policy, such as Medigap).

    The layman in me would think Pub. 969 is forbidding only Medigap policies. Of course Pubs could be poorly written.

    This seems quite similarly worded to your find…..how in the world did you find it?? The main factors seems to be age 65 and employer’s plan.
    Q-43. May a retiree who is age 65 or older receive tax-free distributions from an HSA to pay the retiree’s contribution to an employer’s ……. retiree health coverage?

    A-43. Yes. …….. the purchase of health insurance is generally not a qualified medical expense that can be paid or reimbursed by an HSA. …….However, …….. provides an exception for coverage for health insurance once an account beneficiary has attained age 65. The exception applies to both insured and self-insured plans.

    #1715
    Mr. Snickers
    Participant

    The most definitive guidance I have found is in Internal Revenue Bulletin: 2004-2 dated January 12, 2004.
    Health Savings Accounts
    Q-27. Are health insurance premiums qualified medical expenses?
    A-27. Generally, health insurance premiums are not qualified medical expenses except for the following……In addition for individuals OVER 65…….the EMPLOYEE share of premiums for employer sponsored health insurance, including premiums for employer-sponsored RETIREE health insurance CAN be paid from an HSA.
    For reference I found an old Boglehead post: HSA’s-I Didn’t Know This!, dated March 11, 2017 by ThePrune and from the Health Equity HSA Guidebook, pages 71 and 112.
    As a retiree over age 65, I believe I will be able to reimburse myself from my HSA for my share of the health insurance premiums from my employer-sponsored retiree health care (FEHB) plan.
    Kaneohe, thanks for your comment. Any others?

    #1746
    caesark
    Participant

    If you are able to afford it, it is much better to pay all QME out of pocket. Let your HSA grow like a Roth account. You are always permitted to withdraw the QME in the future, just keep records of all amounts paid out of pocket.

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