Are Insurance Premiums an FSA-Eligible Expense?

Health insurance premiums are not eligible for reimbursement from a Health FSA. IRS Publication 969 lists premiums among the expenses that cannot be paid from a Health Flexible Spending Account, and the rule has no carve-outs for the premium types people most often ask about.¹ The confusion is understandable, because some of those same premiums are deductible on your tax return or payable from an HSA. For FSA purposes, though, they’re all off the table.

The Rule in Publication 969

Under the “Distributions From an FSA” section of Publication 969, the IRS names three categories of expenses that a Health FSA cannot reimburse:

Health insurance premiums of any kind.
Long-term care services and long-term care insurance premiums.
Amounts already covered under another health plan.

The exclusion is categorical. It applies whether the premium is paid pre-tax through payroll or post-tax out of your own pocket, and whether the underlying coverage is a group plan, an individual policy, or a government program. The FSA exists to reimburse out-of-pocket medical costs like copays, deductibles, and prescriptions, not the cost of holding a policy.²

Premiums People Ask About Most

COBRA Premiums

COBRA continuation premiums are not FSA-eligible. When you elect COBRA after losing employer coverage, you pay the full unsubsidized cost yourself. That cost qualifies as a deductible medical expense on your tax return and can be paid from an HSA, but a Health FSA cannot reimburse it.¹ Separately, if your Health FSA had a balance when you left the job, you may be able to elect COBRA continuation of the FSA itself and spend the remaining balance on other qualified medical expenses. Even then, the COBRA premiums you pay for your health coverage are not among those eligible expenses.

Medicare Premiums

Premiums for Medicare Parts A, B, C, and D are health insurance premiums under IRS rules and fall inside the same FSA exclusion. If you’re on Medicare and still have access to an FSA at work, the account can reimburse copays, prescriptions, and other out-of-pocket costs, but not the Medicare premiums themselves. Medicare premiums can be paid from an HSA once you’re 65 or older.¹

Long-Term Care Insurance Premiums

Qualified long-term care insurance premiums are deductible as medical expenses on your tax return and payable from an HSA, subject to age-based annual limits that run from $500 for people aged 40 and under to $6,200 for those over 70 in 2026. Those limits don’t matter for an FSA, because Publication 969 excludes long-term care premiums and long-term care services from FSA distributions entirely.¹

Marketplace and Individual Plan Premiums

Premiums for coverage you buy on your own, whether through the federal Marketplace or directly from an insurer, are also excluded. HealthCare.gov notes that you cannot use an FSA with a Marketplace plan.² Paying with after-tax dollars for a private policy doesn’t change the answer.

Employer Group Health Premiums

Your share of an employer plan premium is usually taken from your paycheck pre-tax under a Section 125 cafeteria plan, so you already receive a tax benefit on those dollars. Even if the premium were paid post-tax, the Publication 969 exclusion would still prevent FSA reimbursement.

Non-Medical Insurance

Life, disability, auto, and homeowner’s insurance premiums are not qualified medical expenses under any IRS rule and are ineligible for FSA reimbursement on that ground as well as the FSA-specific one.³

Why This Gets Confused With HSA Rules

Most of the misinformation on this question comes from readers mixing HSA rules into FSA rules. HSAs allow tax-free withdrawals for four specific categories of premiums that FSAs do not cover:

COBRA continuation coverage premiums.
Health insurance premiums while receiving unemployment compensation.
Medicare Parts A, B, C, and D premiums for individuals aged 65 and older.
Qualified long-term care insurance premiums up to the age-based annual limits.

These exceptions appear in Publication 969 in the HSA section, immediately next to the FSA section that prohibits any premium reimbursement.¹ Benefits summaries that discuss both accounts together often blur the line, and readers walk away thinking the HSA carve-outs apply to their FSA. They don’t.

What to Do If You Need Help With Premiums

Two other account types can pay premiums directly.

Health Savings Account

An HSA can pay for COBRA premiums, Medicare premiums once you turn 65, qualified long-term care premiums within the annual limits, and health premiums while you’re receiving unemployment compensation, all tax-free.¹ To contribute, you have to be enrolled in a high-deductible health plan. The 2026 contribution limits are $4,400 for self-only coverage and $8,750 for family coverage. HSA balances roll over indefinitely.

Individual Coverage HRA

An Individual Coverage HRA is an employer-funded arrangement that reimburses employees for medical expenses including monthly insurance premiums along with out-of-pocket costs.⁴ You can’t elect one on your own; your employer has to offer it in place of traditional group coverage. Where it’s available, it’s one of the few workplace arrangements that pays for premiums directly.

If a Premium Was Reimbursed by Mistake

FSA administrators sometimes process a claim without catching that the underlying charge was a premium. When that happens, the reimbursement should be returned to the FSA or added to the employee’s taxable income. It’s more than a personal bookkeeping issue: repeated improper reimbursements can put the cafeteria plan’s tax-qualified status at risk, which affects every employee in the plan.

If you realize a premium slipped through, contact your plan administrator. The administrator can reverse the reimbursement so 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.³ 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 make that correction.

1
Internal Revenue Service. Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans
2
HealthCare.gov. Using a Flexible Spending Account (FSA)
3
Internal Revenue Service. Publication 502 (2025), Medical and Dental Expenses
4
Centers for Medicare & Medicaid Services. How an Individual Coverage HRA Offer Works