Can You Use Your HSA to Cover ACA Premiums?

This question often comes up during the annual Open Enrollment Period when individuals and families are shopping for health insurance plans under the Affordable Care Act (ACA), commonly known as Obamacare. Here’s what you need to know about using your Health Savings Account (HSA) to pay for ACA premiums.

What is an HSA?

An HSA is a tax-advantaged savings account that allows you to set aside money on a pre-tax basis to pay for qualified medical expenses, including health insurance premiums. Contributions to your HSA are tax-deductible, and withdrawals for qualified medical expenses are tax-free.

Can You Use Your HSA to Pay for ACA Premiums?

Unfortunately, the answer is generally no. Under the current rules, you cannot use your HSA to pay for premiums for your own ACA health insurance plan. However, there are a few exceptions to this rule:

You can use your HSA to pay for premiums for your spouse or dependents who are enrolled in a COBRA plan. COBRA is a federal law that allows employees to continue their health insurance coverage after they leave their job.
You can use your HSA to pay for premiums for your spouse or dependents who are receiving unemployment compensation through a federal or state program.
You can use your HSA to pay for Medicare premiums for your spouse if your spouse is over age 65 and you are not yet age 65.

What Can You Do with Your HSA?

If you cannot use your HSA to pay for your ACA premiums, you may still be able to use it for other qualified medical expenses, such as:

Doctor’s visits
Hospital stays
Prescription drugs
Dental and vision care
Over-the-counter medications and medical supplies

Other Options for Paying ACA Premiums

If you are not eligible to use your HSA to pay for your ACA premiums, you may be eligible for a premium tax credit. This credit is a refundable tax credit that can help you lower the cost of your monthly premiums. You can apply for a premium tax credit when you enroll in an ACA health insurance plan through the Health Insurance Marketplace.

If you are not eligible for a premium tax credit, you can still enroll in an ACA health insurance plan. However, you will need to pay the full cost of your premiums.

Seek Help from a Licensed Agent

ACA health insurance can be complex. If you have questions about using your HSA or other ways to pay for your ACA premiums, it is important to seek help from a licensed agent. A licensed agent can help you understand your options and choose the best plan for your needs.