Hospital Insurance Premiums: FSA Eligibility

Hospital Insurance Premiums: reimbursement is not eligible with a Flexible Savings Account (FSA)
Hospital insurance premiums, if they have not been paid for with pre-tax dollars, are eligible for reimbursement with a health savings account (HSA) or a health reimbursement arrangement (HRA). Hospital insurance premiums are not eligible with a dependent care flexible spending account (DCFSA), flexible spending account (FSA), or a limited-purpose flexible spending account (LPFSA).

What are hospital insurance premiums?

Hospital insurance premiums are the monthly premium costs of retaining a hospital indemnity insurance plan. Hospital insurance premiums are the expense which allows a hospital indemnity insurance plan to reimburse an individual for the expenses associated with confinement in a hospital and having to receive hospital care. Hospital insurance typically pays a set amount – lump, per day, week, month, or per visit — to the individual after having to receive health care in a hospital.

Hospital insurance premiums can be considered eligible for reimbursement with a consumer-directed healthcare account if the original payment of the hospital insurance premium was not made with pretax dollars (BenefitsPRO).

What is the purpose of a hospital insurance premium?

Hospital insurance premiums are paid to ensure that hospital insurance will reimburse an individual for the cost of a hospital stay. The expense of staying at a hospital is often otherwise unaffordable, and so it is better to purchase hospital insurance and to pay the hospital insurance premiums every month. The expense of paying the hospital insurance premium, so long as it's not paid with pretax dollars, is reimbursable with consumer-directed healthcare accounts.

What happens when hospital insurance premiums are paid and the insurance is used?

Usually, the individual will submit the hospital stay information to their insurance provider after the hospital stay has begun. As long as hospital insurance premiums have been paid in full, the insurance provider will process the paperwork necessary to provide whatever insurance reimbursement has been planned. This may be a payment to the hospital, a reimbursement to the individual, or some other form of payment.