Health savings accounts (HSAs) are accounts used for individuals with high-deductible health plans (HDHP).
You can contribute to your HSA and use the funds to pay for qualified medical expenses. How you obtain your HAS is unique to you, whether it’s overseen by an employer, bank, credit union, or insurance company. If you turn 65 years old soon, you will be qualifying for Medicare. Medicare can affect your HSA so be sure to communicate with a We Make Medicare Easy! agent to determine how you will be affected.
How Medicare Affects an HSA
When you enroll in Medicare Part A and/or Part B, you are no longer able to contribute pre-tax funds to your HSA. In order to contribute pre-tax dollars to your HSA, you aren’t able to have any health insurance outside of an HDHP. You can still withdraw from your account after you enroll in Medicare to help pay for medical expenses. Qualified expenses such as deductibles, premiums, copayments, and coinsurances qualify for your funds to be tax-free.
It’s crucial to weigh your options before determining whether your HSA or Medicare enrollment is more beneficial for you. For example, if you work for an employer with fewer than 20 employees, you may need Medicare to have health care, regardless of if you’re going to lose the benefits of your HSA. Choosing to delay Medicare also means you will need to delay collecting Social Security retirement benefits that you are typically eligible for once enrolled in Medicare.
If you decide to enroll in Medicare, be sure to stop contributing to your HSA at least six months prior to enrollment. Regardless of your decision, it’s important to discuss your options with an agent before determining what’s right for you.
Get Started Today
Our agents at We Make Medicare Easy! are ready to help you with coverage and sorting through your options. To get started in Medicare enrollment or further discuss your HSA, connect with an agent today.