I recently have had several clients who had questions about their options regarding Medicare and how it affects their HSA.  An HSA (Health Savings Account) is a tax advantaged account designed to pay for qualified medical expenses.  Medicare rules state that contributions cannot be made to an HSA if someone has Medicare, either Part A or Part B.  Medicare rules also state that Medicare is considered primary coverage for employees who are on an employer health plan that work for a company with less than 20 employees.  These rules can all intersect for some people.

So, a couple of scenarios arise for people who have an HSA:

1. If they work for a company with less than 20 employees and are on the employer health plan, they should enroll in Part B to have primary coverage.  But, if they are on a qualified High Deductible health plan with an HSA, they can’t have Part A or Part B in effect.  So, these people will generally be best served by leaving the employer HSA plan and go to Medicare.

2. If they work for a company with 20 or more employees, they do not need to enroll in Part B because their commercial insurance carrier for their employer health plan is considered primary coverage.  Someone becoming eligible for Medicare, can delay Part A and B to remain on the employer HSA plan.  They will need to make sure that Medicare does not automatically enroll them in Part A.

If you have an HSA and accompanying qualified High Deductible health plan, think about your options as you approach Medicare eligibility.  If you have questions, you can contact David Higgs at David@ChoicesInMedicare.com or visit www.ChoicesInMedicare.com