Health insurance premiums are not FSA eligible. IRS Publication 969 lists “amounts paid for health insurance premiums” among the expenses that a Health Flexible Spending Account cannot reimburse, and the rule applies to every type of premium with no exceptions.1Internal Revenue Service. Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans The confusion is understandable: many of those same premiums qualify as deductible medical expenses on your tax return, and some can be paid from a Health Savings Account. But the FSA rules are stricter, and they draw a hard line at premiums of any kind.
The FSA is built to reimburse out-of-pocket medical costs like copayments, deductibles, and prescriptions, not the cost of carrying the insurance policy itself.2HealthCare.gov. Using a Flexible Spending Account (FSA) It doesn’t matter whether you pay the premium pre-tax through payroll or post-tax out of pocket. Publication 969 also separately excludes long-term care insurance premiums and long-term care services, and anything already covered by another health plan.
Premiums People Commonly Ask About
Because premiums qualify as medical expenses under Publication 502 for purposes of the itemized tax deduction, people assume they’ll work for FSA reimbursement too. They don’t. The categories below come up most often.
COBRA Premiums
COBRA continuation premiums are not FSA eligible. When you lose employer coverage and elect COBRA, you pay the full unsubsidized cost of the plan yourself. That cost is deductible as a medical expense on your return and can be paid from an HSA, but an FSA cannot reimburse it.1Internal Revenue Service. Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans A separate point sometimes confused with this one: if you had money in your Health FSA when you left your job, you may be able to elect COBRA continuation of the FSA itself and spend down the remaining balance on other qualified medical expenses. The premiums you pay to maintain any coverage still aren’t reimbursable.
Medicare Premiums
Premiums for Medicare Parts A, B, C, and D are treated as health insurance premiums and fall under the same exclusion. If you’re enrolled in Medicare and still have access to a workplace FSA, the account can reimburse your copayments, prescription costs, and other out-of-pocket expenses, but not the Medicare premiums themselves. Medicare premiums can be paid from an HSA if you’re 65 or older.1Internal Revenue Service. Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans
Long-Term Care Insurance Premiums
Qualified long-term care premiums have age-based annual limits that can be claimed as medical expenses or paid from an HSA. For 2026, those limits range from $500 for individuals aged 40 and younger to $6,200 for those over 70. None of that matters for FSA purposes, because the FSA cannot reimburse long-term care premiums at all. Publication 969 excludes both long-term care insurance and long-term care services from FSA distributions.1Internal Revenue Service. Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans
Marketplace and Individual Plan Premiums
Premiums for health insurance you buy on your own, whether through the federal Marketplace or directly from an insurer, are also excluded. HealthCare.gov specifically notes that you cannot use an FSA with a Marketplace plan.2HealthCare.gov. Using a Flexible Spending Account (FSA) Paying with after-tax dollars for a private policy outside the Marketplace doesn’t change the result.
Employer Group Health Premiums
Your share of an employer-sponsored health plan premium is usually deducted from your paycheck pre-tax through a Section 125 cafeteria plan. You’re already getting a tax benefit on those dollars, so the FSA can’t reimburse them. Even if the premium were paid post-tax, the Publication 969 exclusion would still apply.
Why HSA Rules Get Mistaken for FSA Rules
The single biggest source of wrong answers on this topic is that Health Savings Accounts have a different, more generous set of rules for premiums. An HSA allows tax-free withdrawals for four specific premium categories:
- COBRA continuation coverage premiums
- Health insurance premiums while you’re receiving unemployment compensation
- Medicare premiums (Parts A, B, C, and D) at age 65 or older
- Qualified long-term care insurance premiums up to the age-based annual limits
These exceptions appear in Publication 969 in the HSA distributions section, right next to the FSA section that prohibits premium reimbursement entirely.1Internal Revenue Service. Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans Many general benefits summaries lump the two accounts together, which leads readers to assume the HSA premium exceptions carry over. They don’t.
Accounts That Can Reimburse Premiums
If paying premiums is what you actually need, two account types do the job.
Health Savings Accounts
An HSA can pay for COBRA premiums, Medicare premiums at 65 or older, qualified long-term care premiums within the annual limits, and health insurance premiums while you’re receiving unemployment compensation, all tax-free.1Internal Revenue Service. Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans To open and contribute, you must be enrolled in a qualifying high-deductible health plan. The 2026 contribution limits are $4,400 for self-only coverage and $8,750 for family coverage. HSA funds roll over indefinitely.
Individual Coverage HRAs
An Individual Coverage HRA is an employer-funded arrangement that reimburses employees for medical expenses including monthly insurance premiums and out-of-pocket costs.3Centers for Medicare & Medicaid Services. How an Individual Coverage HRA Offer Works The ICHRA is set up and funded by your employer rather than through your own payroll deductions, so you can’t elect one on your own. If your employer offers one in place of traditional group coverage, it’s one of the few workplace arrangements that pays premiums directly.
If a Premium Was Reimbursed by Mistake
FSA administrators sometimes approve claims without catching that the underlying expense was a premium. When an ineligible premium is reimbursed, the amount should be returned to the FSA or included in the employee’s taxable income. Repeated improper reimbursements can also jeopardize the tax-qualified status of the entire cafeteria plan, which affects every enrolled employee.
If you realize you claimed a premium, contact your plan administrator to correct it. The administrator can reverse the reimbursement, and you can repay the amount. If the error affected a prior tax year and reduced your taxable income, you may need to file an amended return on Form 1040-X.4Internal Revenue Service. Publication 502 (2025), Medical and Dental Expenses You generally have three years from the date the original return was filed or two years from the date the tax was paid, whichever is later, to file that correction.