Can you use an HSA or FSA for long-term care?

Why the two accounts split here

Both accounts are built on the same foundation: money that has not been taxed being spent on medical care, with the definition of medical care taken from the tax code rather than from a health insurer's summary of benefits. An HSA distribution is tax-free when it pays or reimburses a qualified medical expense, which the IRS defines as an amount paid for medical care for you, your spouse or your dependents, to the extent it is not reimbursed by insurance. A health FSA reimburses qualified medical expenses as specified in the plan, which generally means expenses that would qualify for the medical and dental expenses deduction.

The split appears in the lists of what is excluded. For the HSA the exclusion is narrow and has a carve-out list written into it: you may not use HSA funds to pay for insurance, except long-term care insurance, continuation coverage, coverage while receiving unemployment benefits, and Medicare or other coverage once you are 65 or older. For the health FSA the exclusion runs the other way, and long-term care is named as something you cannot receive a distribution for at all.

One more structural difference is worth knowing before the detail, because it explains the timing rules later on. An HSA is an account you own and keep, and the IRS says you do not have to make withdrawals each year. A health FSA is an arrangement inside a single plan year, and what is left at the end of the year is generally lost unless the plan offers a grace period of up to two and a half months or a carryover.

What the IRS counts as long-term care

This is the part most families skip, and it decides everything else. The IRS defines qualified long-term care services as necessary diagnostic, preventive, therapeutic, curing, treating, mitigating and rehabilitative services, plus maintenance and personal care services, that meet two conditions at once. They must be required by a chronically ill individual, and they must be provided under a plan of care prescribed by a licensed health care practitioner.

Chronically ill is a defined term, not a general description of frailty. Within the previous 12 months a licensed health care practitioner has to certify one of two situations. The person cannot perform at least two activities of daily living without substantial assistance for at least 90 days because of a loss of functional capacity, and the IRS names those activities as eating, toileting, transferring, bathing, dressing and continence. Or the person requires substantial supervision to be protected from threats to health and safety because of severe cognitive impairment.

Maintenance and personal care services get their own sentence for a reason: this is help with the person's disabilities, including protection from threats to health and safety where there is severe cognitive impairment. That category is what pulls everyday help with bathing and dressing inside the medical definition, but only for a person who has already been certified as chronically ill. Without the certification, the same help is personal care and does not qualify. If the family is arranging care at home rather than in a facility, the in-home care cost page prices the hours, and it is worth asking the care agency which of its staff can supply the documentation a tax claim would need.

What an HSA can pay

Qualified long-term care services are medical care under the tax code, so an HSA can pay for them. Three practical rules sit on top of that permission. The expense has to be incurred after the account was established, because the IRS states that expenses from before that date are not qualified medical expenses. The amount cannot already have been reimbursed by insurance. And the money can be left in the account and used later, since there is no requirement to withdraw each year.

Long-term care insurance is the part people miss. Insurance is normally off limits to an HSA, and long-term care insurance is one of four named exceptions. Two conditions apply. The policy has to meet the tax definition of a qualified long-term care insurance contract, which the IRS describes as a contract that covers only qualified long-term care services and is guaranteed renewable, carries no cash surrender value and no money that can be paid, assigned, pledged or borrowed, directs refunds and dividends only to reducing future premiums or increasing future benefits, and generally does not reimburse what Medicare would reimburse except where Medicare is a secondary payer or the policy pays a per diem without regard to expenses. The second condition is the age-based cap on how much premium can be treated as a qualified expense.

The other allowed items behave the way people expect. COBRA and other continuation coverage, coverage while receiving unemployment compensation, and Medicare or other health coverage once you are 65 or older all count, with Medicare supplement policies such as Medigap excluded. The IRS adds a caution that fits long-term care directly: expenses equal to a tax-free HSA distribution cannot also be claimed as an itemized deduction, so the account and the deduction are two ways of using the same dollar, not two ways of using two dollars.

The age-based premium limits

The IRS caps how much long-term care insurance premium can be treated as a medical expense, and the cap steps up with the age of the person the premium was paid for. For premiums paid in the 2025 tax year the amounts are $480 at age 40 or under, $900 at ages 41 to 50, $1,800 at ages 51 to 60, $4,810 at ages 61 to 70, and $6,020 at age 71 or over. The medical expenses publication states that the limit is for each person, which matters in a household paying two premiums.

Two notes on using these figures. They are the limits the IRS publishes for treating a premium as a medical expense, and the HSA publication points to the same age-based limit in the Schedule A instructions, so the numbers serve both purposes. And they are adjusted for later years, so confirm the current year before filing rather than reusing this table. For scale, a single premium cap at the top age band is well under one month of the care it is insuring: the survey this site uses puts a semi-private nursing home room at $9,581 a month and assisted living at $6,200 a month. The cap buys a tax treatment, not a month of care.

What a health FSA can and cannot do

The exclusion is written plainly. Among the expenses you cannot receive an FSA distribution for, the IRS lists health insurance premiums, amounts paid for long-term care, and amounts covered under another health plan. So the facility bill that an HSA could pay is the bill a health FSA cannot. What the FSA does cover is the medical and dental expenses that would qualify as itemized deductions, and the IRS adds that over-the-counter medicine and menstrual care products now count as medical care for this purpose.

The mechanics are tighter than an HSA's in two ways that affect long-term care households. An FSA reimburses expenses incurred during the period of coverage and cannot make advance reimbursements of future or projected expenses, which rules out prepaying a care contract. And the claim needs documentation: a written statement from an independent third party that the expense was incurred and its amount, plus a written statement that it has not been paid or reimbursed elsewhere. A family paying a care facility should therefore ask for itemised statements from the start, because the reimbursement is claimed line by line.

One figure to know if an FSA is in play at all: for tax years beginning in 2025 the limit on voluntary employee salary reductions into a health FSA is $3,300, and where a plan permits a carryover the maximum carryover is $660. The IRS also notes a detail that surprises people, which is that employer contributions providing coverage for long-term care have to be included in income. If the money is going anywhere near a long-term care arrangement, it is worth confirming with the plan administrator which expenses the plan document actually recognises, since the plan decides within the tax rules.

What this changes for a household paying for care

The practical version is a division of labour between the two accounts. The HSA is the one that can reach the care itself, provided a licensed health care practitioner has certified the person as chronically ill and the services run under a plan of care. It is also the one that can pay the long-term care insurance premium, up to the age band. The health FSA is the one that stays with the medical side of a care situation, such as prescribed medicines and equipment, while the facility's monthly charge stays outside it.

Order matters when a household is drawing on both. Long-term care insurance benefits are usually paid first, because the amount an account can reimburse is what insurance has not already covered. Then the HSA, within its limits on premiums and with the documentation in place. What is left is private pay, and at that point the household is looking at the same set of options as everyone else: the cost of care hub compares the five main settings, the care cost calculator puts a monthly number on a household's own mix, and in-home care at the survey median runs to $6,673 a month at 44 hours a week. The fees that sit outside a quoted monthly rate are worth reading before the first invoice, because the line items a tax claim needs and the line items a facility bills are not always the same shape.

A word on the limits of this guide. These are tax rules, and the definitions do real work: a certification for chronic illness is not a medical opinion in passing, it is a specific statement from a licensed health care practitioner within the previous 12 months. Accountants and tax preparers apply these rules to individual returns, and the current-year figures come from the IRS instructions rather than from a page like this one. Use this to know which questions to ask, and confirm the answers against the publications linked in the sources below.

Where these rules come from

Every tax rule and every figure on this page was read from the Internal Revenue Service on the day it was published. Publication 502, Medical and Dental Expenses, supplied the definition of qualified long-term care services, the definition of a chronically ill individual and the six activities of daily living, the definition of maintenance and personal care services, the four requirements for a qualified long-term care insurance contract, the age-based premium limits for 2025 and the statement that the limit is per person, the nursing home rule and its split between medical and personal reasons for residence, the nursing services rule and the requirement to divide an attendant's time, and the note that expenses equal to a tax-free HSA distribution cannot also be deducted. Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans, supplied the definition of a qualified medical expense, the rule that expenses incurred before the account is established are not qualified, the statement that withdrawals are not required each year, the four insurance exceptions for an HSA and the pointer to the age-based premium limit, the 2025 health FSA salary reduction limit of $3,300 and the maximum carryover of $660, the FSA documentation requirements, and the list of expenses an FSA cannot reimburse, which names long-term care. Care costs are the 2025 national medians published by the cost survey named above. Nothing on this page is tax advice.