Individual Insurance Premium FSA

The Individual Insurance Premium FSA allows employees with individual (non-group) health insurance (including covered tax dependents) to set aside money in an account similar to the Dependent Care FSA to pay the premiums on a before tax basis. To qualify, the premiums for the policies must be billed to the employee, not COBRA or any other group plan. Examples of eligible policies include health, accident, dental, hospital, or cancer insurance. Any premium that has already been pre-taxed does not qualify for this plan. For example, a premium deducted from spouse's payroll or a retirement check. Employers set the maximum contribution amounts. Only expenses incurred during the plan year can be reimbursed. Any amounts paid by an employee for future or projected expenses are not eligible for reimbursement until after services have been rendered and the expense has been incurred. Plan dollars must be used within the plan year or the established grace period since the "use it or lose it" rule applies.