(888) 335-8996

Speak with a Licensed Insurance Agent

Close this search box.

Medicare and Health Savings Accounts (HSA)

There are guidelines and rules you must follow when it comes to Medicare and Health Savings Accounts. A Health Savings Account is a savings account in which money can be set aside for certain medical expenses. As you get close to retiring, it’s essential to understand how Health Savings Accounts work with Medicare.

Find Medicare Plans in 3 Easy Steps

Let us help you navigate your Medicare journey

How Medicare and Health Savings Accounts Work

Health Savings Accounts help pay for deductibles, coinsurance, copayments, and other medical expenses. Once the money goes into the Health Savings Account account, you can withdraw it for any medical expense, tax-free. Additionally, you can earn interest, your balance carries over each year, and this can become an investment for a retirement fund. Unfortunately, some restrictions come along with having a Health Savings Account with Medicare.

HSA is only for those enrolled in a high-deductible plan. Since Medicare is not considered an HDHP, enrolling makes you ineligible to contribute to an HSA.

Once you enroll in Medicare, it’s illegal to continue to contribute to a Health Savings Account. The only exception to continue contributing to your HSA is to postpone enrolling in Medicare. As long as you have creditable coverage through your employer, you won’t be penalized for delaying your enrollment.

Before you assume your employer coverage is considered creditable coverage, make sure to talk to your benefits administrator. If your employer has less than 20 employees, it won’t be considered creditable coverage.

What is the Penalty for Having an HSA and Medicare?

Once you enroll in Medicare, the IRS sets your contribution limit to your HSA to zero. What this means is, beginning the first month you’re enrolled in Medicare, you’re not allowed to contribute any monies into your HSA.

This limit also pertains to any period of retroactive Medicare coverage. If you continue to contribute, or your Medicare coverage becomes retroactive, you may have to pay a 6% excise tax on those excess contributions. If you happen to have excess contributions, you can withdraw some or all to avoid paying the excise tax.

Can HSA Funds Be Used to Pay Medicare Premiums?

The good news is, even though you can’t continue to contribute to your Health Savings Account once enrolled in Medicare, you can still use your Health Savings Account funds to pay for many medical expenses, including premiums.

Qualified Medicare Expenses:

  • Medicare Part A, Medicare Part B, and Medicare Part D Prescription Drug plan premiums (Part A is usually premium-free)
  • Medicare Advantage plan premiums
  • Copays
  • Coinsurance

Can I Use My HSA Funds to Pay My Medicare Advantage Premiums?

Yes, you can use your HSA funds to pay for your Medicare Advantage premiums as well as any copays and coinsurance.

Find Medicare Plans in 3 Easy Steps

Let us help you navigate your Medicare journey

Can I Use My HSA Funds to Pay My Medigap Premiums?

No, Medigap premiums are not considered a qualified Medical expense. You can not use your HSA funds to pay your Medicare Supplement plan (Medigap) premiums.

Can My Health Savings Account Reimburse Me for Medicare Premiums?

You can take tax-free withdrawals from your Health Savings Account to reimburse the cost of premiums you’ve paid out of pocket. Even if those premiums were an automatic deduction from your Social Security check. If this is something you didn’t know, you can still withdraw money at any time to reimburse yourself for those premiums.

Can You Contribute to an HSA with Medicare Part A?

Once you enroll in Medicare Part A, you cannot actively contribute to your HSA. Any contributions made after you’re Part A is active will be considered excess contributions.

If I’m Enrolling in Medicare Later This Year, How Much Can Be Contributed to My HSA?

Health Savings Account beneficiaries can contribute until the first day of the month; Medicare is sufficient. It’s your responsibility to prorate both your regular contribution and the catch-up contribution if applicable.

To determine the prorate maximum contribution, add the IRS maximum plus the catch-up amount. Then, divide that number by 12 months and multiply by the number of months you won’t have Medicare.

How to Learn More About Your Medicare Options

Whether working or on a fixed income, every penny counts. With each year bringing escalating healthcare costs, obtaining supplemental Medicare insurance is becoming more and more necessary.

A licensed insurance agent can help you understand your Medicare expenses and help you explore plans that meet your budget. In addition to having an agent by your side, you’ll get continuous support on claims, appeals, and much more from our Client Care Team.

Call us for more information on the various types of policies available in your area including Medigap, Medicare Advantage, and Medicare Part D Prescription Drug plans. You can also fill out our rates comparison form to see plans available in your area.

Kayla Hopkins

Kayla Hopkins

Content Editor
Kayla Hopkins is an accomplished writer and Medicare guru serving as the Editor of MedicareFAQ.com. Upon completing her Communications degree from Ohio University, Kayla dedicated her time to understanding the ever-evolving landscape of healthcare. With her extensive background as a Licensed Insurance Agent, she brings a wealth of knowledge and expertise to her writing.
Ashlee Zareczny

Ashlee Zareczny

Compliance Manager
Ashlee Zareczny is the Compliance Manager for MedicareFAQ. As a licensed Medicare agent in all 50 states, she is dedicated to educating those eligible for Medicare by providing the necessary resources and tools. Additionally, Ashlee trains new and tenured Medicare agents on CMS compliance guidelines. Ashlee is a Medicare expert who specializes in Medicare Supplement, Medicare Advantage, and Medicare Part D education.

83 thoughts on "Medicare and Health Savings Accounts (HSA)"

  1. I turned 65 in June of 2021 and correctly took care of stopping HSA contributions and signing up for Medicare Advantage. Now, almost a year later, I just learned that I could use my HSA funds to pay my Medicare Advantage premiums.

    My question is: what about the Medicare Advantage premiums I paid in 2021? Thanks,

    1. Suzanne, HSA funds can be used for premiums or other medical expenses. However, previously costs paid cannot be refunded in order to use HSA money.

  2. I am going to turn 65 in May and am covered by my husbands HDHP. He is younger than I am by a few years. We have an HSA where the company contributes and they also offer health incentives for walking or doing health assessments etc. and they will deposit so much into the account/Debit card. My husband does not contribute $$ to the account. I realize I am still able to use the funds available. Am I still able to do the incentives? My last incentive contribution was in November for walking. I will be applying for Medicare part A only in May as I was trying to wait the 6 mo. after the last contribution on my behalf. Thanks for any help you can give me!

    1. Marianne, once your Part A goes active you will no longer be eligible for the incentive deposits. Any deposits made on your behalf are illegal once you are enrolled in Medicare. However, your husband may still contribute.

  3. My husband is currently 65 as of Feb 2, 2022 so he applied for Medicare in November 2021, as that is what we have always been told and understood that at least 3 months before 3 months after turning 65 you should enroll in medicare as it is free and required. Meanwhile in November of 2021he was required to decide on what insurance plan he would be on for the 2022 year, so we elected the same coverage we had in 2021 a HDHP with an HSA, not realizing that if you filed for medicare you could no longer contribute to HSA, so we had to file a form SSA-521 which is a request to withdrawal of application for medicare with SSA. This allowed us to continue to contribute to our HSA for the next 6 months till June 2022 as he plans on retiring in January 2023. (6 months till retirement) My question is can he contribute the full year contribution allowable amount of 7,200 within the first 6 months?(Jan to June of 2022) also the employer will contribute 500 in June and 500 in December will this be a problem? this amount will bring us up to the total allowable amount including the after 55 catch up amount for HSA. Please advise.

    1. Sandra, your husband would be able to make his yearly contribution as long as he stops contributions before his Medicare becomes active.

  4. Hi, I am going to sign up for full social security in September and i have been contributing to an HSA and not on medicaire part a. if i sign up if i stop my hsa contributions right now what penalty will i pay.

    1. Nancy, to avoid paying a penalty, be sure to stop HSA contributions before enrolling in Medicare Part A. As long as all contributions were made prior to enrolling, there is no additional fee.

  5. My husband is on medicare but I am not. I have a high deductible insurance plan. Can I contribute the family amount or any amount to our HSA account?

    1. Renee, once your husband has enrolled in Medicare, he is no longer eligible to make HSA contributions. However, if you are not yet enrolled in Medicare coverage, you are still eligible to contribute

  6. I’m 66, receiving my SS, and working for the same company as my spouse (500+). She is covered by a high deductible ins plan with an HSA. I’m covered by a non high deductible plan. Can I contribute to her HSA to help cover my medical bills? Previous to receiving SS I had the high deductible plan with an HSA of my own, but had to move to the non high deductible without the HSA.

    1. Cliff, you are no longer able to contribute to an HSA since you receive Social Security benefits. However, any contributions your wife makes to her HSA may be used to cover your medical expenses.

  7. I will be turning 65 in April and I have high deductible health plan. also have a HSA that I contribute to and I’m still working. I plan to sign up for Medicare part a and i would like to know when i should discontinue adding money to my HSA. so I will not have to pay a penatly

    1. Faye, once you are enrolled in Medicare Part A, you can no longer contribute to an HSA. So, I recommend making your final HSA contributions the month before your Medicare Part A effective date.

  8. I am 66 and 2 months. Full retirement age. I work and am covered by insurance and have an HSA. I applied for SS retirement in Sept 2021. I was unaware that I would automatically be enrolled in Medicare part A retroactively 6 months. Now I have HSA contributions to remove . Can I pay tax on the amount I contributed those 6 months back and leave it in the account, or do I have to take it out?

    1. Regina, you do have the option to pay a penalty tax on the amount contributed after Part A enrollment. It is my understanding that any money withdrawn from the HSA account that was contributed after Medicare enrollment will be subject to back taxes and will accrue a 6% penalty tax until you withdraw the entire excess amount. Any money contributed to the account prior to Medicare enrollment is eligible to be used tax free.

  9. I turned 65 in March 2021 and deferred my enrolling in Medicare until 12/1/21 due to having a HDHP through my employer and continued contributing to my HSA. SS is now back dating my enrollment date to 4/1. How do I handle the excess contributed into my HSA account or can I get SS to change my Medicare date to 12/1 to avoid issues?

    1. Diane, thank you for reaching out. If your Medicare enrollment is backdated to 4/1 and you were contributing to an HSA during that time, you would be penalized for the excess contributions made after Medicare enrollment. I advise reaching out to Social Security with proof of credible coverage from 4/1-12/1 to move your Medicare enrollment date to 12/1, avoiding penalty.

  10. Good lesson for others: don’t listen to your friends or even Medicare. My wife works for a large employer and her insurance covers both of us. I am self-employed. We are both over 65. We both mistakenly enrolled in Part A although her employer contributes $1000 to an HSA (She doesn’t contribute to an HSA…she only contributes to an FSA). When we found out this was not allowed, we immediately filed form 1763 to disenroll. My question is: if they we do get disenrolled, will we still be penalized and what exactly is the penalty?

    1. Hi Bob, thank you for reaching out. Penalties accrued differ on a case-by-case basis. However, any contributions made to an HSA after enrolling in Medicare could be considered “excess” by the IRS. It is my understanding that any money withdrawn from the HSA account that was contributed after Medicare enrollment will be subject to back taxes and will accrue a 6% penalty tax until you withdraw the entire excess amount. Any money contributed to the account prior to Medicare enrollment is eligible to be used tax free.

  11. It sounds as though I may have a problem.

    My employer offered only a high-deductible plan for the last two years. It included an HSA, for which they did payroll deductions, and I set up to contribute the max. I did not know about the HSA contribution restriction with Medicare.

    When I turned 65 last year, I enrolled in Medicare Part A, as required, but did not enroll in Part B. I continued the HSA contributions this year.

    I am now about to retire, and will have to enroll in Part B. How big of a mess am I looking at?

    1. John, the contributions you made after enrolling in Medicare are be considered “excess” by the IRS. Excess contributions will be taxed an additional 6 percent when you withdraw them. Also, you may be required to pay back taxes on the contributions plus an additional 10 percent tax because you enrolled in Medicare with an HSA.

  12. I will be 65 next year and plan to enroll in Medicare part A only and continue my employer insurance. The plan is a high deductible HSA plan and my employer contributes to it on my behalf. I know that I can’t have any contributions to the HSA. Am I still allowed to participate in the plan if I and my employer do not contribute to my HSA?

  13. Hi Lindsay, I didn’t know the part about not being able to contribute to an HSA and went ahead and signed up for Part A effective Aug 1st. I have made almost $400 in contributions this month – can I have my employer withdraw those funds from my HSA account to avoid the taxes on them?

    1. Hi Sue! Your HSA contributions only impact your tax return if your Part A coverage is retroactive. If that happens, then I would reach out to your benefits administrator or tax accountant to see if they recommend withdrawing the funds.

  14. I signed up for Medicare last month (start 7/1/21). Before that I was on a high deductible health plan for the first six months. I thought that I would be able to fund my HSA for the equivalent of six months but have not done so. It is true I have lost my opportunity by not doing so by 6/30/21?

    1. Hi Jim! Once you enroll in Medicare, you cannot contribute to your HSA without facing tax penalties. If your Medicare is in effect, you have lost the opportunity to contribute to your HSA going forward.

  15. Hello Lindsay,

    I turned 65 April, 2021 and plan to continue working for several more years. I have a high deductible medical plan through my employer for my wife and son. Am I able to continue participating in the HSA as the funds are used primarily for my spouse’s medical expenses? I can understand if it was only me, but the HSA budget was determined based on 3 adults during the annual enrollment in October 2020.
    My son is 20, he graduated college and on his own this year.

    1. Hi Gary! Unfortunately, you cannot continue to contribute to your HSA regardless of who & what the funds are used for once you have Medicare.

  16. Lindsay, I wrote to you earlier (December 1, 2020). To summarize, my wife is still employed (20+ employees) and plans to continue to work. I am retired and, as I mentioned was my intention then, have signed up for Medicare, beginning July 2021 (the month I turn 65). Currently, I am still covered under my wife’s HDHP until the end of the month, which she makes HSA contributions deducted from her pay. My question is: when I switch to Medicare next month, can I still use the HSA to pay for medical expenses, deductibles, premiums, etc.? Thanks.

    1. Hi Chuck! Welcome back! Yes, you can still use your HSA to pay for medical expenses such as co-pays, deductibles, etc. The only thing your HSA cannot pay for is Medigap premiums.

  17. Hi Lindsay,

    I will be 67 yr in September 2021. I have been contributing to an HSA through my employer and am not enrolled in Medicare. Due to family circumstances, I am looking at either retiring in May 2022 or going to part-time 20 hours/week.

    In August, we enroll in Benefits for the next fiscal year beginning Oct 2021. I am planning to change my insurance to HRA plan but will NOT enroll in Medicare until I actually retire. I plan to delay SS to age 70.

    I just want to be sure that stopping the HSA plan and enrolling in HRA plan will be sufficient time to avoid any penalties with HSA and Medicare.

    1. Hi Lynn! Yes, stopping the HSA plan and enrolling in an HRA plan will avoid any penalties.

  18. Hi Lindsay,

    Last September I turned 65 and stopped making HSA contributions even though I am working and still eligible, and not enrolled in Medicare. Can I now make contributions for the period of time between September and 6 months ago (essentially for Sep., Oct., and Nov.) without incurring the tax penalty?


    1. Hi Dan! You can make up contributions from the past six months to your HSA As long as your Part A does not become retroactive when you do enroll. However, if you enroll in Part A and it does become retroactive, you could be penalized for those contributions. When you go to enroll in Part A, just make sure it does not become retroactive. If you contact Medicare directly they can help with that.

      1. To be clear, does the retroactive period cover “when” the contribution is made/paid or does it cover the period that the contribution is “for”? For example, I’d be writing the check today (inside the retroactive period) for a period prior to the start of the retroactive period.

      2. Hi Dan, I would reach out to your benefits administrator to find out. This is one of those scenarios where yes, you could be allowed to contribute now for a previous period, but when Medicare sees it they could make a mistake and think you contributed during your retroactive period for that time frame and cause you a ton of hassle. It might not be worth the trouble.

  19. I will be 65 January 2022, am enrolled in a HDHP for myself and spouse. I contribute to the HSA as does my employer up to the family limt.
    My spouse originally waived Medicare Part A when he turned 65 last January 2020. He recently enrolled in Social Security to start in April and he got a Meidcare Part A enrollment retroactive to 9/1/2020.
    If I want to continue to contribute the ‘family’ limit to my HSA, does he need to cancel his Medicare Part A plan by using the CMS1763 form?

    1. Hi Terri! As long as your spouse is not contributing to the HSA, then his Part A going retroactive is not an issue.

  20. Hello Lindsey… My wife and I are on my employer’s HDHP retirement heath care plan. I’m will be going on Medicare in Feb. 2022 and my wife is 3 years younger and will continue on my employers plan. My question is can she still contribute to the HSA if its still in my name?

    1. Hi Edward! I don’t believe your wife can continue to contribute to your HSA if it’s under your name. However, I would ask your benefits administrator to confirm.

  21. My husband is retired and on Medicare Part A, but is also covered by my work insurance on a High Deductible Health Plan. Is it ok to be on Medicare Part A and an HDHP, as long as he does not contribute to an HSA? And may I contribute the family amount to my HSA, or only the single amount?

    1. Hi LeeAnne! Yes, your husband can be on Medicare Part A & your employer’s HDHP as long as he is not the one contributing to the HSA. You can continue to contribute to the family amount. I hope this helps!

  22. Ms. Engle,
    i recently turned 65, am not on Medicare, & have a high deductible health plan through my employer. I plan to retire in July and go on Medicare in August. i have read, seemingly, conflicting info about contributing to my HSA. Some sources say I can contribute up to the time I start Medicare. Others say that I cannot contribute within 6 months of starting Medicare (in my case, that would mean 1/31/21 at the latest). What say you?

    1. Hi Frank! In some scenarios, your Medicare coverage can become retroactive. In this case, you would want to stop contributing to your HSA before your retroactive effective date. For most, your coverage will not be retroactive. I hope this helps!

      1. How do I find out if my coverage becomes retroactive? Is this something I would have to specifically request, or should I contact Medicare? thanks again for your anticipated reply Ms. Engle!

      2. Hi Frank! If an individual does not enroll in Medicare when he/she is first eligible (and is not enrolled in Social Security), his/her later enrollment in Medicare Part A is retroactive for six months. If you’re enrolling more than 6 months after you first become eligible, which it sounds like you are, your coverage could become retroactive. I found an article here that provides good information. However, yes, I would contact Medicare directly to find out for sure since it’s unique to each individual.

  23. So just a follow up question. I am still working full time. Both my spouse and I are enrolled in my employer high deductible plan. I currently contribute to my HSA. If my spouse is enrolled in Medicare Part A can I still contribute to the HSA? We are both still covered under my plan.

    1. Hi Kathy! Yes, you can continue to contribute to your HSA. Since Medicare is individual health insurance, your spouse being enrolled in Part A won’t impact your HSA contributions. You will need to stop contributing 6 months prior to you enrolling in Part A.

  24. Hi Lindsay, I turn 65 in January 2022 and plan to apply for Medicare 3 months prior which would be October 2021. When should I stop contributing to my HSA 6 months prior to January or 6 months prior to October?

    1. Hi Dale! Great question. You would stop contributing to your HSA 6 months prior to your Medicare effective date. So, 6 months prior to January.

  25. Hi Lindsey, I have been retired three years and am presently not working. I am now eligible for Medicare. I have retained my HDHP from my former employer with a HSA. My health is good. Is it a good idea to sign up for Medicare now?

    1. Hi Gary. That depends if you’re able to keep your HDHP. If so, then comparing your costs for the HDHP plan with Medicare is recommended. You might find that Medicare is cheaper. If you cannot keep your HDHP, then yes, it’s a good time to sign up for Medicare now.

  26. Hi Lindsay, I’m 69 and have been on Medicare for 4 years. I’m not work, but have an HSA with $0 in it. Can I transfer existing 401K IRA funds into the HSA account without penalty? Thanks Lon

    1. Hi Lon! I don’t think that would be allowed. You cannot make any contributions to your HSA once you start taking Medicare. I believe a transfer from your 401k would be considered a contribution. However, I would double-check with an accountant or tax advisor to verify.

  27. Lindsay, my wife and I are approaching age 65. My wife is still employed (20+ employees) and plans to continue to work. I am retired and am covered under my wife’s HDHP, which she makes HSA contributions deducted from her pay. Since she must pay my entire premium for my HDHP coverage ($900+ a month), I have decided to sign up for Medicare when I become eligible. Because I was covered under my wife’s HDHP, will my signing up for Medicare present any tax problems, since she will continue to contribute an HSA? I understand that when my wife signs up for Medicare in the future, HSA contributions can no longer be made. Will my signing up for Medicare while she stays on her present plan present a tax penalty?

    1. Hi Chuck! Since Medicare is individual, and the HSA contributions are from your wife, your enrollment into Medicare will not impact her contributing to the HSA. You will not see any tax penalties. You are correct, once she is enrolled in Medicare then she will need to stop contributing to the HSA. Let me know if you have any more questions

  28. Lindsay, I am 65 and have an HSA plan through my employer. I opted out of Medicare A but I will start drawing SS at age 66 plus 2 months(April 2021). I quit contributing to my HSA in November, 6 months prior to receiving SS. Because I still work, as of Jan 1, 2021 i will be on my employers PPO plan. My question is when should I enroll in Medicare A, 1-1-2021 or 4-1-2021?

  29. My partner will be retiring at her SSA retirement age and starting Medicare then also. She is stopping her HSA contributions 6 months prior to avoid the tax problems. Her company also contributes to her HSA. Do they also need to stop contributing to the HSA 6 months prior to her retirement or can those contributions continue without causing her any problems?

    1. Hi Kurt! According to the IRS, you cannot contribute to your HSA at all, this includes both employee and employer.

  30. Hi Lindsay,

    Thanks for the quick reply and the link on Is Medicare Mandatory.

    I read the Medicare Mandatory information and have an additional question.

    There is a statement under What Parts of Medicare are Mandatory:
    “Enrolling in Part A is mandatory to keep your Social Security benefits.”

    I just want to confirm my understanding that:

    I can file for my Social Security Benefits without enrolling in Medicare Part A as long as I have my employer Health Insurance?

    Thanks again for your help,

    1. Hi Ed! I should’ve been more specific, I apologize. Medicare is not mandatory, however, if you’re collecting Social Security income you cannot opt-out of Part A. Regardless if you have employer health insurance. If you start collecting Social Security benefits, you must enroll in Part A and you can no longer contribute to your HSA. Let me know if you have any more questions!

  31. Hi Lindsay,

    I have reached 66 years old this year (FRA).
    I am and intend to remain employed at my company of 17,000+ employees.

    I am enrolled in a High Deductible health insurance plan (family) through my employer.
    I intend to remain on the High Deductible Health Insurance plan through my employer.
    I currently have an HSA account that my employer makes an annual contribution too.

    I would like to file for Social Security benefits and have been told my current income will not impact by SS benefits and allow collecting both.

    I spoke with my health insurance company and they stated that as long as I continue to work for my employer, they will remain my primary insurance (and for my family too).

    When I file for SS, is it required to file for Medicare Part A even though I will remain on my High Deductible Health Insurance?

    If yes, would filing for Medicare Part A remove my eligibility for my HSA account?

    Thanks for your help,

    1. Hi Ed! Medicare is not mandatory, you don’t have to enroll in Part B when you start collecting Social Security benefits. However, if you’re collecting Social Security benefits, you cannot opt-out of Part A. Most people choose to enroll in Part A with or without group insurance since it’s premium-free for most and provides extra benefits. You will not be eligible to continue to contribute to your HSA if you enroll in Part A. So yes, filling for Part A would remove your eligibility to contribute to an HSA account. If you continue to contribute to your HSA once you enroll in Part A, you will be penalized.

  32. Hi. I am employed full time (100+ employees) and have employer insurance coverage. We are currently (2020) on a high deductible insurance plan with a HSA. I pay into the HSA and my employer pays into the HSA. My husband is on my medical insurance plan. He is on disability and he starts Medicare part A in November 2020. Do I have to stop my HSA payments out of my paycheck and employer contribution for 2020 starting in November? For 2021 elections, my employer states that I cannot have a high deductible plan and I cannot contribute to the HSA for both myself and spouse and child due to husbands Medicare part A status. I was told I could only choose an HMO or traditional insurance plan with my husband being on Medicare. Is that correct?

    1. Hi Sandi! As long as your husband is not contributing to your HSA account, then you should not have to make any changes to your current HSA contributions. Your husband’s Part A status does not impact your HSA contributions since Medicare is individual plans. However, this is somewhat of a grey area if your current plan is attached to the HSA and you plan to keep your husband on your group coverage. We have a great article on Medicare and employer coverage that may help answer some of your questions. Based on your question, it sounds like the best option is to get your husband on both Part A and Part B of Medicare, then enroll him in either a Medigap or Medicare Advantage plan to supplement his Original Medicare benefits. This option won’t impact your HSA contributions or your options during the 2021 elections.

  33. I understand that Medicare part A is retroactive for 6 months. I have a HSA and employer heath coverage (HDHP) that I plan on keeping until I retire at age 66. What happens if I have hospital expenses that I pay out of my HSA in that retroactive Medicare period. How will I recoup those payments?.

    1. Hi Sheila! Using your HSA account to pay your out of pocket medical expenses is no different then if you were to use a debit/credit card or cash. You would just need to submit your receipt to Medicare for reimbursement. The retroactive period only negatively impacts your HSA if you were contributing to it during that retroactive period. That’s when you could see penalties. I hope this helps!

    1. Hi Lee! Any HSA contributions must stop six months before your Medicare effective date in order to avoid tax penalties. You would want to stop contributions ASAP. You’ll owe 6% excise taxes on any disallowed pretax contribution that you may have made after your Medicare became active. I hope this helps!

      1. I retired 9/30/20 (unplanned) and had been contributing to an HSA since 1/1/20. I applied for Medicare and Part A coverage was backdated to 1/1/20. I withdrew all of my HSA contributions (plus the interest earned.) However my employer also made contributions to my HSA. What do I do about those contributions?

      2. Hello! As long as you withdrew all your contributions, both your own and your employers, you should be able to avoid the excess tax. However, I would contact your benefits administrator from your previous employer to confirm.

  34. I was told that if you have a H.S.A. that Medicare will require you to use the money in that account before Medicare will cover any expenses. Is this correct?

    1. Hi Mike! No, Medicare will not require you to exhaust your Health Savings Account funds before they cover your medical expenses. I hope this helps!

  35. Lindsay, I am covered under my husband’s medical insurance and he has HSA contributions deducted from his pay. I am disabled and am covered by Medicare Part A only. I also turn 65 later this year but have opted out of Part B due to coverage under my husband’s insurance. Due to the Medicare Part A, can we still claim as a couple or should be only have money deducted as a single?

    1. Hi Lauri! Your husband can continue contributing to his HSA until he joins Medicare. Your HSA contributions are based on his status in this scenario instead of yours. If you were contributing to the HSA, then there would be an issue. I hope this helps!

  36. Lindsey – since one can’t use an HSA to pay for Medigap premiums, but they CAN reimburse themselves for out-of-pocket costs for premiums they’ve paid themselves, can’t they then reimburse themselves for Medigap premiums? Wouldn’t this be tax free? I’m a Medicare agent and Certified Senior Advisor (CSA) in the Seattle, WA area but have never come up against an HSA or FSA before now. I have a client turning 65 in Oct, she says she has a medical savings account, wants to pay premiums from that. With her severe chronic medical issues, she needs a Medigap policy, not a MAPD. She’s looking at some very high-cost surgeries in the near future, so Medigap is best for her situation.

    1. Hi Sandy! Yes, you can be reimbursed for the premiums you paid for your Medicare Supplement plan. From my research, it says SOME Medicare Supplement plans you can get reimbursed the cost of the premium you paid out of pocket from your HSA. I’m not able to find much detail or documentation regarding this, unfortunately. I would call the HSA benefits administrator directly to see what the process is to get reimbursed for her supplement premiums.


Your email address will not be published. Required fields are marked *

string(3) "Yes"

5.0 Satisfaction Rating

It’s free and no obligation!

Find the Most Affordable Medicare Plans in your Area