Can I use my IRA to pay for COBRA or alternative health insurance?

Yes, Individual Retirement Accounts and money rolled over form from an employer's retirement plan are available to pay for health  insurance in any circumstance. IRS gives a special break to those who are unemployed. Withdrawals used to pay for health insurance while unemployed (defined by the IRS as the period of time when you are receiving unemployment compensation) are not subject to the early withdrawal penalty. All types of health insurance payments, including COBRA insurance, qualify for this tax break and this provision is completely independent from the COBRA subsidy.

revised 3/11/09

(back to index of frequently asked questions about COBRA coverage) provides help with COBRA issues

COBRA continuation coverage may provide temporary protection when changing jobs, going through a divorce or negotiating other life transitions. Choosing the right health insurance is crucial to protect your health and financial security.