Short answer: Usually no. HSA funds generally can’t be used tax-free for health insurance premiums, except for limited situations like COBRA, Medicare, long-term care insurance, or coverage while receiving unemployment benefits.
In most cases, health insurance premiums are not considered qualified medical expenses under IRS rules, which means they generally cannot be paid with HSA funds on a tax-free basis.
There are several important exceptions where HSA funds may be used tax-free to pay premiums. These include COBRA continuation coverage, health insurance premiums paid while you are receiving unemployment compensation, and certain long-term care insurance premiums, subject to IRS age-based limits.
HSA funds may also be used to pay Medicare premiums once you are enrolled in Medicare. This includes premiums for Medicare Part A (if applicable), Part B, Part D, and Medicare Advantage plans, but does not include Medigap (Medicare supplement) premiums.
If you use HSA funds to pay for premiums that do not fall into one of these exceptions, the distribution is treated as non-qualified. That amount becomes taxable income and may also be subject to a 20% additional penalty if you are under age 65.
Sources
- IRS, Publication 969 – Health Savings Accounts: https://www.irs.gov/forms-pubs/about-publication-969
- IRS, Publication 502 – Medical and Dental Expenses: https://www.irs.gov/publications/p502
Content history
Originally published: March 27, 2025
Last reviewed: January 26, 2026