No — Individual Insurance Premiums is not HSA eligible
Individual insurance premiums are not eligible with an FSA, but may be eligible with a health reimbursement arrangement (HRA) and are eligible with a health savings account (HSA) unless already paid for with pre-tax dollars. Using HSA funds for Individual Insurance Premiums would be a non-qualified distribution subject to income tax, plus a 20% penalty if you are under 65.
Paying with HSA funds results in income tax on the amount and a 20% penalty if you’re under age 65. Keep Individual Insurance Premiums off your HSA unless circumstances change.
How to claim it
- Pay with a regular card, not your HSA debit card.
- If a physician prescribes it for a diagnosed condition, some otherwise-ineligible items may qualify with a Letter of Medical Necessity — ask your provider.
Frequently asked questions
Is Individual Insurance Premiums FSA or HRA eligible too?
No. Because FSAs and HRAs follow the same IRS Publication 502 rules as HSAs, Individual Insurance Premiums is generally not reimbursable through an FSA or HRA either.
Can I use my HSA debit card to pay for Individual Insurance Premiums?
No. Individual Insurance Premiums is not a qualified medical expense. Using your HSA card would be a non-qualified distribution subject to income tax and a 20% penalty if you are under 65.
Do I need to keep a receipt for Individual Insurance Premiums?
Yes — for every HSA withdrawal the IRS requires documentation proving the expense was qualified. Keep itemized receipts for at least 3 years after the tax year.
Can I reimburse myself years later for Individual Insurance Premiums?
Yes — the IRS imposes no time limit on HSA reimbursements. As long as the expense was incurred after your HSA was established and you have documentation, you can reimburse yourself years or even decades later.