How will Medicare affect my Health Savings Account?
You cannot be part of a health savings account [1] (HSA) if you are on Medicare. With a health savings account, you can set aside pre-tax income to help you pay for certain medical expenses. This helps you save money on total healthcare costs. If you are older than 65 years old, your Part A coverage will begin six months before the date you enroll. You will face a tax penalty if your Part A [2] coverage occurs at the same time as when you put money into your health savings account.
You and your employer must stop adding money into a health savings account six months before you plan to retire or apply for RRB benefits [3] or Social Security. Having a high deductible health plan with an HSA based on you or your partner means you’re eligible for a special enrollment period. This will also allow you to sign up for Part B [4] without facing any punishment.
You can still withdraw money from your health state account after your coverage starts. You can use the money from your health state accounts to pay for qualified medical expenses, such as:
- Deductibles
- Premiums
- Coinsurance [5]
- Copayments [6]