Group LTC Benefits Blog

Using HSA Dollars to Pay for Long-Term Care Insurance



The high cost of Long-Term Care can tap into employees retirement income and impact their lifestyles. Finding tax-free ways to pay for coverage can help employees plan for their future while easing expenses now. An HSA is a special savings account that can pay for qualified health care expenses. HDHP medical plans are paired with an HSA and allow participants to contribute pre-tax dollars from their paycheck. Some companies may make employer contributions to your HSA. This is free money to use toward doctor visits, prescriptions, and even a portion of your LTCI premiums. HSA funds roll over year to year and can be taken with them if you retire or leave the company - just like a long-term care policy. The only caveat with HSA account is that if the employee is no longer enrolled in an HDHP, they cannot make personal contributions to his/her account.

Contribution Limits:

If enrolled in an HDHP, the policy holder can make personal contributions up to the annual maximum. In 2017, the contribution limits are $3,400 for individuals or $6,750 for families. If the policy holder(s) are age 55 or older, they can make catch-up contributions up to $1,000 each year. Personal contributions and employer funding cannot exceed annual limits.

Saving with an HSA:

Personal contributions via payroll deduction are contributed to your account pre-tax. This lowers your taxable income and allows you to set aside money for health care expenses without being taxed on the income. If you’re planning for retirement, you may want to contribute up to the annual maximum to help pay for health care expenses and LTCI premiums.

Using HSA Dollars to Pay for LTC Insurance:  

Pay for a portion of your LTCI premiums by using your HSA debit card or by writing a check. Make sure you have enough funds in your account and do not exceed the annual LTCI premium maximum based on your age.

Attained Age During Taxable Year

2017 LTCI Premium Maximum

40 or under










Check out more information about HSA and LTC group plans in the Essential Guide to Group LTC Insurance. 

Source: IRS Revenue Procedure 2016-55 (for 2017 limits)


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Topics: Group LTCI,, Employee Benefits, Multi-life

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