Long-Term Care Insurance

Paying Long-Term-Care Premiums With HSA Money

The amount you can withdraw from a health savings account tax-free to pay premiums depends on your age.

Can I use money from my health savings account tax-free to pay long-term-care premiums?

Yes. If you have a “tax-qualified” long-term-care policy, you can use money from your HSA tax-free to pay a portion of the premiums. A long-term-care policy is tax-qualified if it pays benefits when you’re unable to perform at least two activities of daily living (such as bathing and dressing) or when you have severe cognitive impairment. Most long-term-care policies qualify.

The amount you can withdraw tax-free for premiums depends on your age. In 2014, you can use up to $370 tax-free from your HSA for long-term-care premiums if you’re 40 or younger, $700 if you’re 41 to 50, $1,400 if you’re 51 to 60, $3,720 if you’re 61 to 70, and $4,660 if you’re over 70. Those amounts increase slightly each year to account for inflation.

You can also use HSA money tax-free for Medicare Part B and Part D premiums and Medicare Advantage (but not medigap) premiums. See FAQs About Health Savings Accounts for more information about eligible expenses.

For more information about long-term-care insurance, see Options for Covering Long-Term-Care Costs.

Most Popular

4 Steps to a Happy Single Retirement
happy retirement

4 Steps to a Happy Single Retirement

The number of seniors who are single and childless is growing. This group needs to be purposeful as they think about their health and finances and fos…
April 8, 2021
Where's My Stimulus Check? Use the IRS's "Get My Payment" Tool to Get an Answer
Coronavirus and Your Money

Where's My Stimulus Check? Use the IRS's "Get My Payment" Tool to Get an Answer

The IRS has an online tool that lets you track the status of your third stimulus check.
April 4, 2021
37 Ways to Earn Extra Cash in 2021
business

37 Ways to Earn Extra Cash in 2021

We flag a wide variety of cool side hustles to earn bonus bucks to cover expenses expected and unexpected as we begin to emerge from the pandemic lock…
April 8, 2021

Recommended

Deduct Expenses for Long-Term Care on Your Tax Return
Long-Term Care Insurance

Deduct Expenses for Long-Term Care on Your Tax Return

The IRS allows some limited tax breaks on medical expenses and insurance premiums related to long-term care.
March 23, 2021
A COVID Storm Hits Senior Living
Coronavirus and Your Money

A COVID Storm Hits Senior Living

The pandemic has created significant challenges for all types of senior living communities. Because of that, it's more important than ever to review a…
March 3, 2021
Caught in the Middle: How Young Parents Can Plan for Long-term Care
long term care

Caught in the Middle: How Young Parents Can Plan for Long-term Care

One family’s story shows how important long-term care plans are … and how whole life insurance with a long-term care rider can help.
October 29, 2020
7 Things Medicare Doesn’t Cover
Healthy Living on a Budget

7 Things Medicare Doesn’t Cover

Medicare Part A and Part B leave some pretty significant gaps in your health-care coverage. Here's a closer look at what isn't covered by Medicare.
October 1, 2020