Can Health Savings Account Funds Be Used To Pay For Health Insurance Premiums?

While Health Savings Account (HSA) funds can be used for a long list of health care expenses before you become 65, these funds cannot be used to pay your monthly premiums for your high-deductible health insurance. Once you turn 65, though, it's a different story. At that time, you can withdraw money from your HSA to pay for anything without incurring a 20-percent penalty on the withdrawal. You will have to pay taxes on the withdrawal, though.
Health Savings Accounts May Be Used To Pay For Qualified Long-term Care Insurance
Health insurance is of critical importance, but it doesn't cover a significant amount of the care that is often needed as people age. Long-term care insurance helps with the day-to-day assisted living expenses that aren't covered by health insurance, including help that can keep you in your own home or increase care in an assisted living facility or nursing home.
By age 65, nearly 40 percent of people spend some time in a nursing home, which may only mean a short-term stay while recovering from a fall or other injury that makes independent living difficult. Neither Medicare, nor Medicare Supplement policies, covers long-term care expenses and those costs can be unmanageable. It's typical for private nursing home costs to range from $65,000 to $90,000 per year!
When looking into long-term care plans, it is important to understand certain features that govern how the plans work. Be sure that your plan covers a range of locations, including adult day care, assisted living facilities and at-home services. Also, confirm exactly what triggers these benefits. Typically, the benefits become available when you are no longer able to perform at least two activities required during daily living.
Long-term care insurance also has limits on benefits, such as how much it will pay for a specific service or a period of time that it will cover a specific service. Even though the average stay in a nursing facility is about 2.5 years, you may want to see what it costs for lifetime coverage. On that note, you may also be interested in an inflation rider to protect you from inflationary cost increases.
Long-term care insurance also has elimination periods, during which you must pay for your long-term care expenses. Typically, the longer that period lasts, the lower the cost of coverage will be, much like the trade-off of low premiums for high-deductible health insurance.
What Else Can Health Savings Accounts Be Used To Fund?
You can withdraw funds from your HSA and pay for many services not covered by health insurance even before you turn 65. Common withdrawals include dental expenses because typical dental policies only have limited coverage for a restricted network of dentists.
Both mental and physical therapies may also be funded through an HSA. That includes services from psychoanalysts, psychiatrists, psychologists and psychotherapists. In terms of physical therapy, you can pay for chiropractor services, hydrotherapy and medical massage therapy from an HSA.
Other health-care related costs that health insurance rarely covers include acupuncture, aromatherapy, Ayurvedic Medicine, healing services provided by a Christian Science Practitioner or other type of healer, homeopathy and Traditional Chinese Medicine. All may be funded through an HSA.
With the wide range of health care that may be funded from an HSA, some lodging and transportation costs may be included, as well as disability-related expenses, including special telephone and TV equipment as well guide dogs expenses.
In addition, your HSA can be used to pay for these kinds of expenses that are incurred by your spouse or a dependent member of your family including same sex and domestic partners, even if they are not covered under the insurance policy.