Can I pay my spouse's insurance premiums with my FSA?

If you're married and have an FSA (flexible spending account), you've probably wondered whether or not you can use it as dependent care to pay for your spouse's health insurance premiums.

So, let's get right to it. Unfortunately, the answer is no, you can't use your FSA funds to pay for your spouse's health insurance since premiums don't qualify as an eligible FSA expense (which means you can't use your FSA for your own insurance premiums, either).

Maybe that's not the news you wanted to hear. But the important details come from learning why they don't qualify. So, let's take a look at why your spouse's insurance premiums aren't covered - and learn what is - so you know what to expect when planning medical expenses for your family.

Why can't I use an FSA to pay for my spouse's health insurance premiums?

The IRS determines what healthcare expenses are eligible for reimbursement with an FSA. So, while health insurance premiums help pay for medical care, the money you pay to the company isn't being directly applied to any specific treatment or diagnosis for a medical condition. This means that insurance premiums don't fall into any FSA-eligible categories.

The purpose of an FSA is to cover out-of-pocket expenses for medical care that aren't already covered by your regular health insurance. It's meant to help you bridge the gap between what your insurance pays and what you're expected to pay by allowing you to use pre-tax dollars set aside in your paycheck.

Are there any exceptions?

We don't like doing it again, but no, there aren't any exceptions to this rule. You can't use your FSA funds to pay for your spouse's health insurance premiums under any circumstances, even if your spouse has healthcare coverage through COBRA.

So what is covered?

You can use your FSA funds to cover any of you or your spouse's qualified medical expenses that aren't already covered by a health insurance plan, including co-pays, diagnostic tests, hospital stays, deductibles, prescriptions, and insulin.

Over-the-counter medications, as well as medical equipment like blood sugar testing kits, bandages, braces and crutches, are also eligible. You can even request an FSA debit card (if applicable to your plan) for your spouse to make it easier to pay for these types of eligible expenses.

At times you'll find that your spouse's health insurance will only cover a portion of the cost of necessary medical procedures. In these cases, you can also use your FSA to cover the remaining balance.

Something to keep in mind is that eligible expenses must be incurred in the current plan year to be reimbursed. You won't be able to use your FSA to cover any appointments or procedures that took place prior to the annual start date of your plan.

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