Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Can you use HSA to pay for COBRA Premium?
Old 04-26-2019, 11:37 PM   #1
Dryer sheet aficionado
Prague's Avatar
 
Join Date: Apr 2017
Posts: 31
Can you use HSA to pay for COBRA Premium?

Given our pending ER, we plan to be on COBRA as our health insurance in the next 18 months. I called my HSA company (Mellon Bank in this case) to ask whether we can use our fund in the HSA account to pay for the COBRA health insurance premium as COBRA is . Mellon agent said that we can only do that if we are receiving unemployment benefits from federal or state government.

However, when I checked on IRS website:
https://www.irs.gov/publications/p96...link1000204081
COBRA is clearly one of the scenarios that you can use HSA to pay for the insurance premium.

I would place more trust of the IRS website but when I challenged the Mellon agent, she said that that is what they go by.

I would like to know
a) Your real-world experience with this scenario
b) Are you (or planning) to contribute to HSA even during ER.

Thank you in advance,
__________________

Prague is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 04-27-2019, 02:47 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: NC
Posts: 14,217
We’re paying DW’s COBRA premium out of my HSA. And if you do a search there are all sorts of articles that say it’s permissible, here’s a few (also referring to IRS):

https://www.hsaedge.com/2018/01/15/c...obra-premiums/

https://ttlc.intuit.com/questions/31...ce-with-an-hsa

https://dpath.com/hsa-and-cobra/

https://www.wageworks.com/employees/...ance-premiums/
__________________

__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 45% equity funds / 30% bond funds / 25% cash - radically changed Nov 2018
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 04-27-2019, 08:08 AM   #3
Recycles dryer sheets
erkevin's Avatar
 
Join Date: Oct 2014
Location: Arizona
Posts: 324
Midpack is correct.
Wife and I have HDHPs using DW's COBRA. This will likely be our final year in an HDHP- switching to PPO plan next year. We do contribute to our HSAs and our plan for tax year 2019 is to max out our HSAs ($9000) and withdraw those funds to reimburse ourselves for COBRA premiums. I keep a notebook of all health expenses so I can track those that have been reimbursed and those that have not.
erkevin is offline   Reply With Quote
Old 04-27-2019, 03:19 PM   #4
Dryer sheet aficionado
Prague's Avatar
 
Join Date: Apr 2017
Posts: 31
Our HSA contribution limit for 2019 is only $7000 (family plan). A bit surprised that yours was $9K. I thought these would the same for everyone.
Prague is offline   Reply With Quote
Old 04-27-2019, 03:20 PM   #5
Recycles dryer sheets
erkevin's Avatar
 
Join Date: Oct 2014
Location: Arizona
Posts: 324
Age 55 catch-up provision ($1K each)
erkevin is offline   Reply With Quote
Old 04-27-2019, 06:57 PM   #6
Full time employment: Posting here.
mn54's Avatar
 
Join Date: Sep 2007
Location: mpls, mn
Posts: 528
Quote:
Originally Posted by Prague View Post
Our HSA contribution limit for 2019 is only $7000 (family plan). A bit surprised that yours was $9K. I thought these would the same for everyone.
the difference is if you have 2 individual hsa plans or one family plan.. the individual limit is 4450 for 55+, the family limit is 7900 for 55+.
mn54 is offline   Reply With Quote
Old 04-27-2019, 07:48 PM   #7
Recycles dryer sheets
erkevin's Avatar
 
Join Date: Oct 2014
Location: Arizona
Posts: 324
HSAs have to be separate- there is no family plan HSA. Therefore, if on an HDHP family plan and both spouses are 55+, both can take the $1000 extra.
https://www.hsaedge.com/2017/03/25/h...separate-hsas/
erkevin is offline   Reply With Quote
Old 04-27-2019, 08:36 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 23,007
Right, HSAs are individual accounts. You are not limited to one account just because you are on a family insurance plan.
__________________

__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Reply

Tags
cobra, hsa


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
HSA + Cobra = can make deductible contributions? someguy Health and Early Retirement 2 02-15-2014 12:26 PM
Use HSA $$ or pay out of pocket? Aiming_4_55 Health and Early Retirement 11 01-13-2011 03:28 PM
To COBRA or not to COBRA~ mickeyd Health and Early Retirement 1 09-04-2009 09:22 PM
Pay COBRA premiums using HSA free4now FIRE and Money 3 08-22-2006 01:18 PM
Can I use a pay-as-you-go phone with my current SIM card? soupcxan Other topics 5 07-10-2006 09:47 AM

» Quick Links

 
All times are GMT -6. The time now is 02:40 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2019, vBulletin Solutions, Inc.
×