When Health Savings Meet Medicare

What You Need to Know Before You Sign Up

Approaching Medicare eligibility, you can benefit in knowing how your Health Savings Account (HSA) will interact with Medicare. HSAs are fantastic tools for saving pre-tax dollars to cover qualified medical expenses, but once you enroll in Medicare – specifically Part A or B – you can no longer contribute to your HSA. However, you can still use the funds you’ve already accumulated for approved spending. This makes timing essential: if you’re still working past age 65 and covered by a high-deductible health plan, delaying Medicare enrollment might let you continue maximizing your HSA benefits. Just be sure to stop HSA contributions in a timely manner. Your Medicare may be backdated requiring pro rating of your contribution to the HSA.

When you transition to Medicare, this doesn’t mean your HSA loses value, it actually becomes a more flexible financial tool. While you can’t contribute anymore, you can use the funds tax-free for a wide range of expenses, including premiums for Medicare Part B, Part D, even premiums for other beneficial health coverages, and copays. Strategically pairing your Medicare enrollment with smart HSA planning can stretch your healthcare dollars and give you more control over your retirement budget.

If this is something you want to learn more about, please call our office at (303) 887-8584. We are here to help; we specialize in Medicare Health Insurance and Health Insurance for those under the age of 65. Our service is never a cost to you.