Use HSA to cover retiree Dental Insurance at age 67

[Spacemzc]

I just retired can I use my HSA to pay for my Dental Insurance premiums now that I am 67

[Bsch4477]

No, you can’t use HSA funds to pay for dental insurance but you can use them for dental expenses. 

[Opus 17]

Yes, insurance premiums over age 65 are allowable.  See publication 969.

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.

@Bsch4477  Please review. 

[Bsch4477]

Pub 969 pg. 9 lists the exceptions for using HSA funds for insurance premiums. Dedicated dental insurance is not on that list. Of interest is that (like vision insurance) dental insurance is not considered essential medical coverage. 

[Opus 17]

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@Bsch4477 wrote:

Pub 969 pg. 9 lists the exceptions for using HSA funds for insurance premiums. Dedicated dental insurance is not on that list. Of interest is that (like vision insurance) dental insurance is not considered essential medical coverage. 

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You are getting two things mixed up.

On page 5, Vision Care is one type of insurance you can have that does not make you ineligible to contribute to an HSA.  

Page 9 describes qualified expenses, the words "vision" or "dental" are nowhere on page 9.  Instead, it says "You can't treat insurance premiums as qualified expenses unless the premiums are for (4) medicare and other health coverage if you are over age 65."

In other words, if you are under age 65, a vision or dental policy does not disqualify you from making contributions, but the premiums for those policies are not qualified expenses.  At age 65 or older, those premiums are qualified expenses.  

Remember the rules for contributions and the rules for withdrawals are separate. 

[Bsch4477]

As I look into this further I get contradictory answers. I guess I am hung up on whether a dental insurance policy is considered health care. I would support the OP deducting the premium costs as you have suggested. 

[dmertz]

Regarding health insurance that would be a qualified medical expense, 26 U.S. Code § 223(d)(2)(C)(iv) says:

(iv)in the case of an account beneficiary who has attained the age specified in section 1811 of the Social Security Act, any health insurance other than a medicare supplemental policy (as defined in section 1882 of the Social Security Act).

I see no reason that dental insurance would not be included as a member of "any healthcare insurance."