Cancer Insurance Premiums: FSA Eligibility

Cancer insurance premiums reimbursement are not eligible with a flexible spending account (FSA), limited care flexible spending account (LCFSA) or a dependent care flexible spending account (DCFSA). However, premiums may be eligible on an HRA or HSA, unless already paid for with pre-tax dollars. Check with an administrator as to which premiums will qualify.

What is cancer insurance?

Cancer insurance is a form of supplemental insurance that is designed to help offset the out-of-pocket medical and indirect, non-medical expenses related to cancer that most medical plans won't cover. These policies are relative newcomers to the insurance industry, and they were designed to help patients and their families cover the skyrocketing cost of cancer drugs, as well as manage the financial risks that come with the high cost of cancer treatment.

While health insurance is designed to cover medical expenses, doctor visits, hospital visits, medications and will cover the vast majority of cancer treatment costs, co-payments and co-insurance portions can still be astronomical in some cases. Experimental drugs and treatments can also dramatically increase medical costs if they are necessary to alleviate a type of cancer, which typically are not covered by most general insurance policies. Worse yet, some individuals may be forced to pay for cancer treatments after losing income from missing work or on a limited worker's compensation budget, which could put them into serious financial difficulties (National Association of Insurance Commissioners). As such, cancer insurance can provide invaluable assistance to pay for common expenses incurred during cancer treatment, including:

  • Lodging expenses for out-of-town care
  • Home care
  • Child Care
  • Auto/Fuel/Parking and other general transportation expenses
  • Food supplements
  • Over-the-counter (OTC) medicines not covered by insurance

When are cancer insurance premiums covered by consumer-driven healthcare accounts?

In the vast majority of cases, health insurance premiums are not covered by consumer-driven healthcare accounts, with a few exceptions. Under a health reimbursement arrangement (HRA), the plan language is written by the employer, so if health insurance premiums can be paid with these allocations, cancer insurance premiums would certainly fall under this distinction.

However, with health savings accounts (HSA), premiums are typically not qualified medical expenses unless they are used to pay for long-term care insurance premiums, health care continuation coverage (such as COBRA), health care coverage while receiving unemployment compensation under federal or state law and Medicare and other healthcare coverage if the HSA account holder is 65 or older. As such, in only very limited situations could cancer insurance premiums be paid for with HSA dollars.

Eligibility Table

Flexible Spending Account (FSA) Limited Care FSA Dependent Care FSA Health Savings Account (HSA) Health Reimbursement Account (HRA)


Eligible with Rx

Eligible with LMN

Not Eligible


AZ-PROD-WEB01 6/19/2018 5:10:20 AM