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IRS: Health FSAs Cannot be Used for Insurance Premiums

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A recently released IRS letter reaffirms the agency’s view that funds from a health flexible spending arrangement (health FSA) may notbe used to reimburse health insurance premium payments or Medicare premium expenses.

Certain Premiums May be Deducted
The IRS letter points out that health insurance premium payments, including those for Medicare, may qualify for purposes of the itemized deduction for medical expenses. However, only premiums for which the taxpayer is not claiming a separate credit or deduction can be included as part of a medical expenses deduction. Additional restrictions apply to this deduction. For more information, please see IRS Publication 502Medical and Dental Expenses.

Click here to read the IRS letter in its entirety.

For additional information on health FSAs, visit our HSAs, FSAs, and Other Tax-Favored Accounts section.

In his career, Gregg has developed specialized expertise in “consumer-driven” and high deductible health plans with HSA and HRA strategies, and sold the first HSA plans issued in Virginia through Assurant Health. He is an expert in analyzing plan design data and has served as account executive for national accounts such as Coca-Cola Enterprises and Tenet HealthCare. Gregg utilizes a strategic approach to establish goals based on each client’s unique culture and competitive environment, and measuring results against jointly established criteria. Gregg Kennerly is a Principal at Advanced Benefit Strategies of Virginia, LLC.
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