Insurance premiums are generally NOT considered IRS-qualified medical expenses unless they are for:
- Continuing COBRA or ERISA coverage
- Certain long-term care insurance
- Health coverage during unemployment
- Coverage over age 65, including Medicare or employer retirement health benefits
If you use your HSA to pay for non-IRS-qualified expenses before age 65, you will have to pay taxes on those funds as well as a 20% penalty. After age 65, you pay taxes but no penalty.
You can find a list of IRS-qualified medical expenses on the IRS website (www.irs.gov), or by viewing
IRS Publication 502 - Medical and Dental Expenses. If you have questions about the eligibility of a medical expense, please consult your tax advisor or the IRS.