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Author: dbsears Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: FSP and insurance premiums Date: 11/5/2007 4:20 PM
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My employer offers a cafeteria benefits plan with a health insurance component. The cost of this health insurance is split between the company and its employees. The company provides a certain number of company dollars that we can use to choose between about three plans. Employees then cover the rest of the cost with after-tax payroll deductions. For my family, this adds up to about $2900/yr.

I would like to know if I can request reimbursement from my flexible spending plan for the cost of this insurance. When I look at IRS Pub. #502, I don't get a clear answer. So, can I make a claim against my FSP for these expenses?

Thanks,

--Dan
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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 96680 of 121061
Subject: Re: FSP and insurance premiums Date: 11/5/2007 6:09 PM
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My employer offers a cafeteria benefits plan with a health insurance component. The cost of this health insurance is split between the company and its employees. The company provides a certain number of company dollars that we can use to choose between about three plans. Employees then cover the rest of the cost with after-tax payroll deductions. For my family, this adds up to about $2900/yr.

I would like to know if I can request reimbursement from my flexible spending plan for the cost of this insurance. When I look at IRS Pub. #502, I don't get a clear answer. So, can I make a claim against my FSP for these expenses?


Assuming that you are referring to a Flexible Spending Arrangement (FSA) when you say 'FSP', the answer is no. IRS Publication 969 (http://www.irs.gov/pub/irs-pdf/p969.pdf) specifically prohibits use of FSA money for healthcare premiums:

You cannot receive distributions from your FSA for the following expenses.

-Amounts paid for health insurance premiums.
-Amounts paid for long-term care coverage or expenses.
-Amounts that are covered under another health plan.


AJ

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