Can you use HSA to pay for COBRA Premium?

[Prague]

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/p969#en_US_2016_publink1000204081
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,

 

[Midpack]

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/can-i-use-my-hsa-to-pay-for-spouses-cobra-premiums/

https://ttlc.intuit.com/questions/3125687-can-i-pay-for-my-cobra-insurance-with-an-hsa

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

https://www.wageworks.com/employees...-my-hsa-to-pay-for-health-insurance-premiums/

 

[erkevin]

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.

 

[Prague]

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.

 

[erkevin]

Age 55 catch-up provision ($1K each)

 

[mn54]

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+.

 

[erkevin]

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/hsa-55-catch-up-contribution-when-spouses-have-separate-hsas/

 

[audreyh1]

Right, HSAs are individual accounts. You are not limited to one account just because you are on a family insurance plan.