Can I contribute to an HSA if I am over 65 and still working?
Asked by: Robin Metz PhD | Last update: August 9, 2023Score: 4.1/5 (15 votes)
At age 65, most Americans lose HSA eligibility because they begin Medicare. Final Year's Contribution is Pro-Rata. You can make an HSA contribution after you turn 65 and enroll in Medicare, if you have not maximized your contribution for your last year of HSA eligibility.
How much can I contribute to an HSA in the year I turn 65?
The IRS annual contribution limits for HSAs for 2021 is $3,600 for individual coverage and $7,200 for family coverage. Individuals age 55+ can contribute an additional $1,000 per year as a “catch-up” contribution. These limits are based on inflation, and generally increase by moderate amounts every year.
What happens if you contribute to an HSA while on Medicare?
Once you enroll in Medicare, you're no longer eligible to contribute funds to an HSA. However, you can use existing money in an HSA to pay for some Medicare costs. You'll receive a tax penalty on any money you contribute to an HSA once you enroll in Medicare.
When should you stop contributing to HSA?
When should I stop contributing to my HSA? You can contribute to an HSA for as long as you want if you haven't enrolled in Medicare and have an HSA-eligible insurance policy.
Can you contribute to an HSA if you are collecting Social Security?
If you have applied for or are receiving Social Security benefits, which automatically entitle you to Part A, you cannot continue to contribute to your HSA.
Medicare’s Tricky Rules on HSAs After Age 65
Can a retired person contribute to an HSA?
Yes. Because you are the individual account owner and not on Medicare, you can still contribute to your HSA. In fact, you can contribute up to the annual IRS limit for family coverage, plus any catch-up contribution if eligible.
Can I pay my Medicare premium with my HSA?
After you turn 65, you can use HSA money tax-free to pay premiums for Medicare parts B and D and Medicare Advantage plans (but not premiums for Medicare supplement policies), in addition to paying for other out-of-pocket medical expenses.
Can I participate in an HSA if I have Medicare Part A?
If you enroll in Medicare Part A and/or B, you can no longer contribute pre-tax dollars to your HSA. This is because to contribute pre-tax dollars to an HSA you cannot have any health insurance other than an HDHP.
Is Medicare free at age 65?
You are eligible for premium-free Part A if you are age 65 or older and you or your spouse worked and paid Medicare taxes for at least 10 years. You can get Part A at age 65 without having to pay premiums if: You are receiving retirement benefits from Social Security or the Railroad Retirement Board.
Can my spouse contribute to an HSA if I am on Medicare?
Your spouse on Medicare is not eligible to contribute to an HSA in his or her name, regardless of whether he or she is covered on your medical plan.
Can I pay my spouse's Medicare premiums from my HSA?
As long as you – the HSA account owner – are age 65+, you can reimburse your spouse's Medicare premiums income tax-free. If you and your spouse have HSAs, it often makes sense to deplete funds from one HSA to avoid paying monthly administration or maintenance fees on two accounts.
Can you contribute to an HSA if you are no longer employed?
∎ Can I contribute to an HSA even if I'm not employed: You do not have to have a job or earned income from employment to be eligible for an HSA – in other words, the money can be from your own personal savings, income from dividends, unemployment, etc.
Who is not eligible for an HSA?
Must be 18 years of age or older. Must be covered under a qualified high-deductible health plan (HDHP) on the first day of a certain month. May not be covered under any health plan that is not a qualified HDHP.
Do I need earned income to contribute to an HSA?
Earned income isn't a requirement to save in an HSA, but you do need an eligible high-deductible health insurance policy and you can't be enrolled in Medicare.
How does IRS know what you spend HSA on?
The IRS requires that you keep receipts for all your Health Savings Account (HSA) spending. HSA distributions (money taken from an HSA account) are nontaxable, but only when the money is used to pay for qualified medical expenses.
How do I qualify for dual Medicare and Medicaid?
Persons who are eligible for both Medicare and Medicaid are called “dual eligibles”, or sometimes, Medicare-Medicaid enrollees. To be considered dually eligible, persons must be enrolled in Medicare Part A (hospital insurance), and / or Medicare Part B (medical insurance).
Can you be on Medicare and still work?
Key takeaways: You can get Medicare coverage if you're still working. If you or your spouse work for a large employer that provides insurance, you can often put off enrollment without penalty. If you work for a company that has fewer than 20 employees, you must sign up for Medicare as soon as you are eligible.
What is the highest income to qualify for Medicaid?
Federal Poverty Level thresholds to qualify for Medicaid
The Federal Poverty Level is determined by the size of a family for the lower 48 states and the District of Columbia. For example, in 2022 it is $13,590 for a single adult person, $27,750 for a family of four and $46,630 for a family of eight.
Can you contribute to an HSA if you have no earned income?
∎ Can I contribute to an HSA even if I'm not employed: You do not have to have a job or earned income from employment to be eligible for an HSA – in other words, the money can be from your own personal savings, income from dividends, unemployment, etc.
Does HSA avoid Social Security tax?
Health Savings Accounts
You still must pay Social Security taxes on HSA contributions, with the exception of Section 125 "cafeteria" plans, which allow employees to pay insurance premiums pretax and can also be modified to allow HSA contributions. These plans are free of both income and Social Security taxes.
What Medicare premiums are HSA eligible?
After you turn 65, you can use HSA money tax-free to pay premiums for Medicare parts B and D and Medicare Advantage plans (but not premiums for Medicare supplement policies), in addition to paying for other out-of-pocket medical expenses.
Who is not eligible for HSA account?
Must be 18 years of age or older. Must be covered under a qualified high-deductible health plan (HDHP) on the first day of a certain month. May not be covered under any health plan that is not a qualified HDHP.
Can you contribute to an HSA if your spouse is on Medicare?
Your spouse on Medicare is not eligible to contribute to an HSA in his or her name, regardless of whether he or she is covered on your medical plan.