An HSA can pay or reimburse the cost of qualified long-term care insurance premiums. However, the amount considered a qualified medical expense depends on your age. Click here for annually indexed LTC premium limitations.
For Example: Kelly, age 41, pays premiums totaling $1,400 in 2021 for a qualified long-term care insurance contract. The limit in calendar year 2021 for deductions for persons who are more than age 40, but not more than 50 = $850. Kelly’s HSA can reimburse up to $850 on a tax-free basis for the long-term care premiums. The remaining $550 ($1,400 minus $850), if reimbursed from the HSA, is not for qualified medical expenses and is includible in gross income and may be subject to an additional 20% tax.
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Using Your HSA