I have the option to remain on the previous employer's COBRA for the foreseable future. Their plan is much nicer than what my new employer is offering while being only a little more expensive.

However, the premiums for the new employer's plan will be deducted before taxes, which suddenly makes them a lot cheaper.

Is there any way the COBRA premiums can also be paid with before-tax monies?

I know, that I could deduct them if they exceeded a certain percentage of my income, but (with any luck) they will not...

I do have some money on HSA, but not much -- it would only cover a few months of COBRA-premiums.

  • Did you get a price quote for the COBRA insurance premium? Many find that it is significantly higher than what they were paying before. The big difference for many is that the the previous employer no longer is paying their portion. Jan 11, 2018 at 18:23
  • Yes, I have. The price comparison I cited in the question is based on that full price. With the employer subsidy it would've been so cheap as to not merit any thoughts of tax-deductions at all.
    – Mikhail T.
    Jan 11, 2018 at 18:27

1 Answer 1


COBRA premiums are an HSA eligible expense, per page 8 of IRS Pub. 696:

Insurance premiums.

You can’t treat insurance premiums as qualified medical expenses unless the premiums are for:


  1. Health care continuation coverage (such as coverage under COBRA).


Items (2) and (3) can be for your spouse or a dependent meeting the requirement for that type of coverage.

FSA funds, however, cannot be used to pay for COBRA premiums, per page 16 of the same document:

You can’t receive distributions from your FSA for the following expenses.

  • Amounts paid for health insurance premiums.

If your COBRA plan is a HDHP, you can continue to contribute to your HSA. Consequently, you would be able to continue to pay your COBRA premiums on a pre-tax basis, as long as you keep contributing to your HSA.

  • Yeah... Unfortunately, my new employer does not offer any means of contributing to HSA -- and what I already do have on mine, would not cover COBRA premiums for more than a few months.
    – Mikhail T.
    Jan 22, 2018 at 22:25
  • 2
    @MikhailT. If the COBRA plan is an HSA-eligible HDHP, you don’t need your new employer’s cooperation to contribute to an HSA. If you aren’t able to contribute to your existing HSA any longer for some reason, you can open your own new HSA and contribute directly. Talk to your local credit union about an HSA. Jan 23, 2018 at 0:35
  • Oh, thanks! Unfortunately, my COBRA is not HSA-eligible... But this is a good information to know.
    – Mikhail T.
    Jan 23, 2018 at 17:32
  • @MikhailT. how did you contribute to the HSA before? You can only contribute to an HSA if you are in a qualified HDHP plan, and you can only elect to extend your existing coverage via COBRA, ie you can't change your coverage upon termination.
    – quid
    Jan 23, 2018 at 20:16
  • The HSA I have is from two employers ago :) I lost the ability to contribute to it, even though it is growing with the stock market for now...
    – Mikhail T.
    Jan 24, 2018 at 16:04

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