Pay COBRA premiums using HSA

[free4now]

I was glancing through the HSA basics brochure at:

http://www.treasury.gov/offices/public-affairs/hsa/pdf/HSA-Tri-fold-english-06.pdf

and noticed something surprising. In the last column it says that an HSA can be used to pay COBRA healthcare insurance premiums!

If that's true, it seems like a no-brainer to open an HSA for almost everyone who uses CORBA insurance. Who wouldn't want the tax deduction? I feel like a dunce that I've been paying COBRA for a few months now without having noticed this.

 

[mathjak107]

i believe the hsa can only pay off a hsa approved policy ...those are those high deductable policies some companies have taken...if its any cobra policy which i m not sure then wow,that would be a great deal........

 

[Martha]

Yes it is nice, but you still need an HSA qualified insurance plan in the first place to establish the account, and if you get insurance through work, that is not going to be in your control.

Long-term care insurance, Medicare, and COBRA premiums can be paid from an HSA. Also, health insurance premiums paid while receiving unemployment compensation may be paid from the HSA.

 

[free4now]

That brochure said:

Any adult can contribute to an HSA if they:
• Have coverage under an HSA-qualified “high
deductible health plan” (HDHP)
• Have no other first-dollar medical coverage (other
types of insurance like specific injury insurance or
accident, disability, dental care, vision care, or longterm
care insurance are permitted).
• Are not enrolled in Medicare.
• Cannot be claimed as a dependent on someone else’s
tax return.

I optimistically hoped that I could contribute if any one of these things were true, but it turns out that all of these things have to be true. 

It looks like having non-HSA CORBA insurance means you have first-dollar non-HSA medical coverage, so the second bullet point makes you ineligible for HSA accounts.   

If you know you are going to be leaving work, this might be a good reason to switch to an HSA work plan.