DISTRIBUTIONS FROM HEALTH SAVINGS ACCOUNTS
01.Core Concepts
PRIOR TO MEDICARE ELIGIBILITY • Distributions for qualified medical expenses: • Completely tax-free • Qualified medical expenses include: • Medical expenses for taxpayer, spouse, or dependents that are not reimbursed by health insurance • COBRA health insurance premiums • LTCI premiums • Health insurance premiums when receiving unemployment compensation • Reimbursement for over-the-counter medications • Non-qualified distributions are subject to tax + a 20% penalty (for those younger than age 65).