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Does Medicare affect health savings accounts?

by on
in Small Business Tax

Q. I have an HSA, but I’m turning age 65 in November. Can I still contribute to the HSA if I enroll in Medicare Part A? A.G., Waterbury, Conn.

No. A Health Savings Account (HSA) enables someone with a high-deductible health insurance plan to set aside funds (within certain annual limits) on a pretax basis. However, if you sign up for any part of Medicare (Part A generally covers hospital expenses), you’re no longer eligible to contribute to the HSA.

Tip: You can postpone participation in Medicare Part A if you also defer receipt of Social Security benefits.

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{ 1 comment… read it below or add one }

Buddy Stuart December 27, 2011 at 6:47 pm

I am 64 years of age and currently receiving early retirement monthly SS benefits. I qualify for medicare effective 04-01-2012.

My wife, age 54, is still working for a large employer. Since 2008, we have been contributing the statutory limit to a Heatlh Savings Account (HSA) accompanied with a high deductible health policy, both provided by the employer.

Can I delay enrollment in Medicare Parts A&B in order to be able to continue to contribute before tax dollars to the HSA until at which time my wife stops working? If so, is there any impact on my social security benefits?


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