Are health insurance premiums HSA eligible?
HSAs are unusually generous about what they cover, so it surprises many people that their monthly health insurance premium usually isn't on the list. The reason is that the tax code treats a premium, the cost of having coverage, differently from the medical care that coverage pays for. Most premiums fall outside qualified HSA expenses, but a handful of situations are carved out, and the Medicare exception becomes especially important after age 65.
The general rule
IRS Publication 969 is direct about this: you generally cannot treat health insurance premiums as qualified medical expenses for HSA purposes. That covers the premium for a typical employer plan or an individual Marketplace (ACA) plan. If you pay one of those premiums out of your HSA, it's treated as a nonqualified distribution: taxable as income, and if you're under 65, generally subject to an additional 20% tax.
Employer plan premiums are often already paid on a pre-tax basis through payroll deductions, so they generally cannot also be treated as qualified HSA expenses.
The four exceptions
Publication 969 lists specific premiums you can pay from an HSA tax-free:
| Premium type | HSA eligible? | Notes |
|---|---|---|
| COBRA / continuation coverage | Yes | At any age, while the continuation coverage is in effect |
| Health coverage while receiving unemployment compensation | Yes | While receiving federal or state unemployment compensation |
| Long-term care insurance | Yes | Qualified LTC premiums, up to an age-based annual limit |
| Medicare Part B, Part D, and Medicare Advantage (Part C) | Yes | Only once you're 65 or older |
| Medicare supplement (Medigap) | No | Excluded even after 65 |
| Employer plan premiums | No | Usually already paid pre-tax through payroll |
| Individual Marketplace / ACA premiums | No | Unless they fall under COBRA or unemployment above |
Medicare Part A premiums also qualify if you pay a premium for Part A. Many people do not, because they qualify for premium-free Part A.
Medicare premiums after 65
For many retirees, this is the most significant exception, and it turns an HSA into a powerful way to cover health costs in retirement. Once you're 65 or older, you can use HSA funds tax-free for most Medicare premiums: Part B, Part D, and Medicare Advantage (Part C). Premiums for a Medicare supplement policy (Medigap) are the exception to the exception, and remain nonqualified.
Because HSA receipts have no reimbursement deadline, some people pay Medicare premiums out of pocket for a while, then reimburse themselves from the HSA later. That strategy requires documentation supporting both the qualified expense and the reimbursement, which is the same recordkeeping rule that governs every HSA expense. See do you need to keep HSA receipts for how long to hold them.
Long-term care insurance
Qualified long-term care insurance premiums are a qualified HSA expense, but only up to a limit that depends on your age and is adjusted each year under Internal Revenue Code Section 213(d)(10). The annual qualified premium limit increases with age. Premiums above that year's limit are not qualified, so it's worth checking the current figure before you reimburse yourself.
What about Marketplace plans and the premium tax credit
Paying a Marketplace premium from your HSA is different from claiming the premium tax credit, and the two shouldn't be confused. An individual Marketplace premium generally isn't an HSA expense unless it's COBRA coverage or coverage while you're on unemployment. Separately, the premium tax credit is a subsidy applied to your Marketplace premium, and coordinating it with an HSA-eligible high-deductible plan is subject to separate tax rules that should be reviewed using current IRS guidance or with a qualified tax professional.
Why Receipt Locker is different
Whether a premium qualifies or not, an HSA reimbursement only holds up if you can produce the record years later. Receipt Locker keeps each premium bill or statement, Medicare statement, or long-term care invoice categorized, preserved, and exportable as an independently verifiable record, so when you reimburse yourself you can show the qualified premium, the amount paid, and that the stored record's integrity can be independently verified.
Keep your HSA proof together
Capture each qualified premium and its statement once, preserved for the day you reimburse yourself. Free to start, no credit card required.
Frequently asked questions
Can you use an HSA to pay health insurance premiums?
Usually not. Premiums generally aren't a qualified HSA expense. The IRS allows four exceptions: COBRA or other continuation coverage, coverage while you're receiving unemployment compensation, long-term care insurance up to age-based limits, and, once you're 65 or older, most Medicare premiums.
Can I pay Medicare premiums with my HSA?
Yes, once you're 65 or older, for most Medicare premiums including Part B, Part D, and Medicare Advantage (Part C). Premiums for a Medicare supplement policy (Medigap) are not qualified.
Can I pay Medicare supplement (Medigap) premiums with my HSA?
No. Medigap premiums are not qualified HSA expenses, even after age 65.
Can I use my HSA for COBRA premiums?
Yes. COBRA and other health-care continuation coverage premiums can be paid from an HSA tax-free, at any age.
Are long-term care insurance premiums HSA eligible?
Yes, up to an age-based dollar limit set by the IRS under Section 213(d)(10) and adjusted each year. Amounts above that limit are not qualified.
Can I pay Marketplace or ACA premiums with my HSA?
Generally no, unless the coverage is COBRA or you're paying it while receiving unemployment compensation. A standard individual Marketplace premium isn't a qualified HSA expense.
What happens if I pay a nonqualified premium from my HSA?
It's treated as a nonqualified distribution: taxable as income, and if you're under 65, generally subject to an additional 20% tax. Maintain documentation supporting why the premium qualified before requesting reimbursement.
Keep reading
- What counts as a qualified HSA medical expense?
- Do you need to keep HSA receipts? (IRS rules & how long)
- Are vitamins HSA eligible?
Last reviewed: July 2026.