I am paying the full cost of the health insurance. I am not working and not collecting unemployment.
Once funds are put into an HSA account they can be used to pay for any qualifying medical expenses or you can reimburse yourself for any qualifying medical expenses you paid out of pocket. Working, not working, on unemployment are all immaterial situations... you are thinking of the form 5329 penalty exceptions and HSA distributions go on a form 8889. Different animal.
Hi and thanks for helping me. To be more specific, I am asking if the medical premium I am paying for my health insurance in my situation is considered an eligible expense for pulling money out of my HSA. I understand that premiums paid to an employer are pretax so I could not in that case. But in this case, I am paying the 100% of the premium out of pocket.
The IRS publications are confusing at best and mention something about only while collecting unemployment - which I am not in this instance.
Insurance premiums are generally not eligible expenses for HSA reimbursement. There are some exceptions:
Insurance premiums.
You can’t treat insurance premiums as qualified medical expenses unless the premiums are for any of the following.
Long-term care insurance.
Health care continuation coverage (such as coverage under COBRA).
Health care coverage while receiving unemployment compensation under federal or state law.
Medicare and other health care coverage if you were 65 or older (other than premiums for a Medicare supplemental policy, such as Medigap).
https://www.irs.gov/publications/p969#en_US_2022_publink1000204086
Read the rules here : https://www.irs.gov/pub/irs-pdf/p969.pdf
Insurance premiums.
You can’t treat insurance premiums as qualified medical expenses unless the premiums are for any of the following.
1. Long-term care insurance.
2. Health care continuation coverage (such as coverage
under COBRA).
3. Health care coverage while receiving unemployment compensation under federal or state law.
4. Medicare and other health care coverage if you were 65 or older (other than premiums for a Medicare supplemental policy, such as Medigap).
The premiums for long-term care insurance (item (1)) that you can treat as qualified medical expenses are subject to limits based on age and are adjusted annually. See Limit on long-term care premiums you can deduct in the Instructions for Schedule A (Form 1040).
Items (2) and (3) can be for your spouse or a dependent meeting the requirement for that type of coverage.
For item (4), if you, the account beneficiary, aren’t 65 or older, Medicare premiums for coverage of your spouse or a dependent (who is 65 or older) aren’t generally qualified medical expenses.