Q & A with BBBA: Can employees use FSA (Flexible Spending Account) funds for insurance premium payments?
Q: Can FSA (Flexible Spending Account)Â funds be used to reimburse employees for insurance premiums?
A: Employeeâ€™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:
- COBRA coverage
- AD&D (accidental death & dismemberment) insurance
- Long-term or short-term disability insurance
- Employer-sponsored health plans (neither by the same employer sponsoring the health FSA, nor another employer, i.e.., the employer of an employeeâ€™s spouse or dependent)
For more information regarding Flexible Spending Accounts, and Employee Benefits for your organization, or to speak with one of our advisors, email Phyllis LoSapio firstname.lastname@example.org.