Can You Do an HSA with COBRA?

Health Savings Accounts (HSAs) are a valuable tool for managing healthcare costs, offering tax advantages and flexibility for saving money for medical expenses. But what if you're on COBRA coverage? Can you still have an HSA while on COBRA?

The short answer is yes, you can have an HSA while on COBRA. However, there are certain rules and considerations you need to be aware of. Here's what you should know:

Rules for Having an HSA with COBRA:

• You must be enrolled in a High Deductible Health Plan (HDHP) to qualify for an HSA.
• COBRA coverage counts as an HDHP, so you are still eligible for an HSA.
• You cannot contribute to an HSA while receiving Medicare benefits, but COBRA does not affect your HSA eligibility.

Benefits of Having an HSA with COBRA:

• HSA contributions are tax-deductible, even if you're on COBRA.
• You can use HSA funds to pay for qualified medical expenses, including COBRA premiums.
• HSA funds roll over year after year, so you can continue to use them even after your COBRA coverage ends.

Overall, having an HSA while on COBRA can help you save on taxes and prepare for future medical expenses. Just make sure to follow the rules and requirements to maximize the benefits of both accounts.

Yes, you can absolutely maintain your Health Savings Account (HSA) while enrolled in COBRA coverage. It's a flexible way to manage your healthcare expenses and keep benefitting from the tax advantages associated with HSAs.