Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Health Savings Accounts (HSA)

Distributions from an HSA

Distributions for Qualified Medical Expenses (continued)

Qualified insurance premiums for HSA purposes are different than premiums that qualify as a medical expense on Schedule A.

A taxpayer cannot treat insurance premiums as qualified medical expenses unless the premiums are for:

  • Long-term care insurance based on premium limits shown in the Volunteer Resource Guide, Important Tax Law Changes, or the Instructions for Schedule A, Itemized Deductions
  • Health care continuation coverage, such as coverage under COBRA
  • Health care coverage while receiving unemployment compensation
  • Medicare and other health care coverage if the taxpayer was 65 or older (other than premiums for a Medicare supplemental policy, such as Medigap)

Mistaken Distributions

If amounts were distributed during the year from an HSA because of a mistake of fact due to reasonable cause, the account beneficiary may repay the mistaken distribution no later than April 15 following the first year the account beneficiary knew or should have known the distribution was a mistake. See the instructions for Form 1099-SA for further information.

Caution

For HSA purposes, expenses incurred before establishing an HSA are not qualified medical expenses. If a taxpayer is considered to be an eligible individual for the entire year under the last-month rule, only those expenses incurred after actually establishing the HSA are qualified expenses.

Example

Laura established an HSA in July. She incurred medical expenses in May and wants to pay those from her HSA. The expenses incurred in May before she established her HSA are not qualified medical expenses for purposes of her HSA.

Instructions for Schedule A, Itemized Deductions

Instructions for Schedule A, Itemized Deductions