Eligible Expenses for HSA

[mdowl]

Hi all,
I know I should know this but I am only 59 and retired a couple of years ago. I still am receiving some deferred comp that is ordinary income to I continue to fund my HSA just to get the tax free growth.

My understanding is that I can use the HSA dollars for insurance premiums once I turn 65 yo. Is there any gotchas I need to be aware of? Or am I missing it altogether?

Thanks in advance.

 

[travelover]

https://www.irs.gov/publications/p969/ar02.html

Insurance premiums are addressed specifically in this document.

You can’t deduct qualified medical expenses as an itemized deduction on Schedule A (Form 1040) that are equal to the tax-free distribution from your HSA.

Insurance premiums. You can’t treat insurance premiums as qualified medical expenses unless the premiums are for:

1. Long-term care insurance.
2. Health care continuation coverage (such as coverage under COBRA).
3. Health care coverage while receiving unemployment compensation under federal or state law.
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 premiums for long-term care insurance (item (1)) that you can treat as qualified medical expenses are subject to limits based on age and are adjusted annually. See Limit on long-term care premiums you can deduct in the instructions for Schedule A (Form 1040). Items (2) and (3) can be for your spouse or a dependent meeting the requirement for that type of coverage. For item (4), if you, the account beneficiary, are not 65 or older, Medicare premiums for coverage of your spouse or a dependent (who is 65 or older) generally aren’t qualified medical expenses.

 

[audreyh1]

For Medicare Premiums - Part B and Part D and Medicare Advantage premiums are qualified HSA expenses. Medicare Part C premiums are not qualified.

 

[RunningBum]

Hi all,
I know I should know this but I am only 59 and retired a couple of years ago. I still am receiving some deferred comp that is ordinary income to I continue to fund my HSA just to get the tax free growth.

Since your question already appears to be answered, I'll just note that having ordinary income is no requirement to funding an HSA. You just need an HSA eligible plan. It's almost always a good idea to fund an HSA whenever possible for the reduction to taxable income, which can give you more room to convert a tIRA to a Roth, take capital gains, or get an ACA subsidy. The tax free growth is also a nice advantage.

 

[mdowl]

Thanks. That is helpful, it is just something I haven't thought about in a while and wanted to confirm.