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Q & A with BBBA: Can FSA (Flexible Spending Account) funds be used to reimburse employees for insurance premiums?

October 17, 2017

Q: Can FSA (Flexible Spending Account) funds be used to reimburse employees for insurance premiums?

A: Employee’s premium payments for health insurance coverage, including dental insurance, is not a qualified FSA reimbursable expense. IRS regulations prohibit health FSAs from reimbursing insurance premiums, even though premiums may be deducted on Schedule A of the Form 1040 (subject to applicable deductible thresholds).

In addition, a health FSA cannot reimburse premium payments for any of the following insurances:

  1. COBRA coverage
  2. AD&D (accidental death & dismemberment) insurance
  3. Long-term or short-term disability insurance
  4. Medicare
  5. Employer-sponsored health plans (neither by the same employer sponsoring the health FSA, nor another employer, i.e.., the employer of an employee’s spouse or dependent)

For more information regarding Employee Benefits and Flexible Spending Accounts for your organization, or to speak with one of our advisors, email Phyllis LoSapio

Brown & Brown Benefit Advisors