Tag Archives: Medicare and HSA

Medicare and HSA: Part 2

I have blogged before about the issue for people who have any Part of Medicare while they are working and on an employer group health plan that includes an HSA.  In short, you can’t contribute to an HSA account while having even premium-free Part A of Medicare due to IRS regulations.  Medicare-eligibles who are faced with this situation have another element to consider and which I was not aware.  When someone delays enrollment in Medicare due to continuing to work past 65 have another potential surprise.  The Social Security department will make Part A retroactively effective up to 6 months.  This means that even if they knew to delay enrolling in any Part of Medicare while having an HSA, they could still be hit with penalties and taxes for the retroactive credit!

You can research this if you want to learn more.  Or, feel free to call me if any questions about this nuance or anything else related to Medicare.

Based in the Richmond, Va area, David Higgs of Choices In Medicare specializes in helping seniors transition to Medicare.  He can be reached at email:  David@ChoicesInMedicare.com or go to website:  www.ChoicesInMedicare.com

Medicare and HSA’s Don’t Mix

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