Health Savings Accounts (HSA) and Medicare • IM

Are you becoming a member of Medicare quickly, have a Well being Financial savings Account (HSA), and are not sure how this can work along with your Medicare advantages? Properly, there are some distinctive guidelines that most individuals are unaware of that might impression their retirement financial savings.

• What’s a Well being Financial savings Account (HSA)
• Well being Financial savings Accounts (HSA) and Medicare
• Stopping HSA Contributions when becoming a member of Medicare
• What you should use your HSA funds for on Medicare

What’s a Well being Financial savings Account (HSA)

A Well being Financial savings Account, often called HSA, is normally supplied via your employer when you’ve got a excessive deductible well being plan (HDHP). This works as an account that you could put cash into each single yr to make use of on qualifying medical bills.

There may be an annual restrict to the quantity of funds that you could contribute both as a person or as a household annually. The funds contributed to the HSA usually are not taxed.

Well being Financial savings Accounts (HSA) and Medicare

When you enroll in both one or each Medicare Half A and Medicare Half B, you’re not eligible to contribute to your HSA.

That is vital to know since most individuals assume they need to enroll in Medicare Half A because it’s normally “free” in the event that they’ve labored sufficient quarters. Nonetheless, becoming a member of any a part of Medicare makes you ineligible to contribute.

If you happen to plan to maintain working and contributing to your HSA, you could possibly delay becoming a member of Medicare so long as your present protection is “Medicare creditable.” To get extra data on this, please go to our weblog on decide Medicare creditable protection.

Stopping HSA Contributions when becoming a member of Medicare

The federal government guidelines say:

You may put cash right into a Well being Financial savings Account as much as the latter of 65, or six months earlier than you be a part of Medicare.

Meaning, for those who’re becoming a member of Medicare at 65, then you may put cash into your well being financial savings account as much as 65. Now, for those who’re going to proceed working, let’s say till 70, you may contribute o your HSA as much as 69.5.

What you should use your HSA funds for on Medicare

When you’ve joined Medicare, you should use your HSA funds to pay for issues like:

• Medicare Half B, Medicare Half D, Medicare Benefit premiums, deductibles, and copays.
• Relevant medical bills
• Imaginative and prescient & Dental bills
• Prescription drug bills

Please notice: HSA funds can’t be used to pay for Medigap premiums.

To conclude, whereas there are individuals who delay enrolling in Medicare as a result of they’ve creditable protection, they have an inclination to contemplate getting Medicare Half A as a result of it’s free. Nonetheless, for many who will proceed working and contribute to an HSA, it’s essential to know your tax implications for those who accomplish that.

A Well being Financial savings Account is a extremely useful gizmo, nevertheless, you simply want to know how this instrument can impression your Medicare choices.

To get assist along with your Medicare determination, you may register for my subsequent free on-line Medicare workshop by going right here: https://be a part of.themedicarecoach.com/free-workshop