Does Medicare Part A disqualify HSA contributions?
Asked by: Waino Paucek | Last update: December 14, 2025Score: 4.4/5 (10 votes)
Can I contribute to an HSA if I have Medicare Part A?
This is the important thing to remember about your HSA when enrolling in Medicare: once you enroll in any part of Medicare, you're no longer eligible to make HSA contributions. This includes Medicare Part A or Medicare Part B – either one will prevent you from contributing further to your HSA.
What disqualifies you from contributing to an HSA?
If you can receive benefits before that deductible is met, you aren't an eligible individual. Other employee health plans. An employee covered by an HDHP and a health FSA or an HRA that pays or reimburses qualified medical expenses can't generally make contributions to an HSA. FSAs and HRAs are discussed later.
Why do I have to stop HSA contributions 6 months before Medicare?
To avoid a tax penalty, you should stop contributing to your HSA at least 6 months before you apply for Medicare. You can withdraw money from your HSA after you enroll in Medicare to help pay for medical expenses (like deductibles, premiums, coinsurance or copayments).
Are Medicare premiums an eligible HSA expense?
If you are the HSA holder and are age 65 or older, Medicare premiums are a qualified expense. But if you're not 65 or older, Medicare premiums for coverage of the spouse or dependent (who is 65 or older) generally aren't qualified expenses.
6-Month Lookback on HSA Contributions Before Medicare
What insurance premiums can be paid with HSA funds?
You can use your HSA to pay for premiums on long term care insurance, COBRA (health insurance you might use if you become unemployed), and even Medicare if you are age 65 or older.
Do I have to stop contributing to my HSA when I turn 65?
If you are not enrolled in Medicare and are otherwise HSA eligible, you can continue to contribute to an HSA after age 65. You are also allowed to contribute the $1,000 catch-up. If you signed up for Medicare Part A and now want to decline it, you can do so by contacting the Social Security Administration.
What is Medicare's 6 month lookback for HSA contributions?
If you contribute to your HSA during those 6 months, you may face a 6% excise tax and an income tax for those contributions. This "6-month lookback" starts when you enroll in Medicare or begin your Social Security retirement benefits.
At what point should I stop contributing to HSA?
Once you turn 65, you can use the money in your HSA for anything you want. If you don't use it for qualified medical expenses, it counts as income when you file your taxes. Six months before you retire or get Medicare benefits, you must stop contributing to your HSA.
Can I use HSA to pay insurance premiums if I retire early?
If you retire before age 65 and you aren't yet eligible for Medicare, you can use money in your HSA to pay your medical coverage premiums.
What is disqualifying coverage for HSA?
No, self-employed individuals such as partners may establish and contribute to an HSA as long as they satisfy all of the other requirements. 7) What coverage is “disqualifying coverage?” Generally, “disqualifying coverage” is any non-HDHP coverage.
What is the 12 month rule for HSA?
It means you must remain eligible for the HSA until December 31 of the following year. The only exceptions are death or disability. If you violate the testing period requirement, your ineligible contributions become taxable income.
What is the downside of an HSA?
Drawbacks of HSAs include tax penalties for nonmedical expenses before age 65, and contributions made to the HSA within six months of applying for Social Security benefits may be subject to penalties. HSAs have fewer limitations and more tax advantages than flexible spending accounts (FSAs).
What is the 6 month rule for Medicare?
You can sign up for Part A any time after you turn 65. Your Part A coverage starts 6 months back from when you sign up or when you apply for benefits from Social Security (or the Railroad Retirement Board). Coverage can't start earlier than the month you turned 65.
Who cannot contribute to an HSA?
You can't contribute to an HSA if you have Medicare coverage, or a plan that pays its share of a covered service without you having to pay deductibles or copayments first (called “first dollar coverage”).
Can I have Medicare Part A and an FSA?
FSA and Medicare Enrollment: If you have an FSA through your employer and become eligible for Medicare at age 65, you can continue using the funds in your FSA for eligible medical expenses.
What happens if you contribute to an HSA while on Medicare?
What are the consequences of contributing funds to my HSA while enrolled in Medicare? Medicare beneficiaries who continue to contribute funds to a HSA may face IRS penalties including payment of back taxes on their tax-free contributions and account interest, excise taxes and additional income taxes.
What is the HSA account loophole?
The ultimate loophole available to almost everyone under the age of 65 in our tax code is the Health Savings Account (HSA). It is the only account you can contribute to and deduct the contribution and then withdraw the money tax free. Think about that, a tax deduction going in and no taxes going out.
Should I max out my HSA every year?
If you're able to make the maximum contribution each year, then it's suggested that you do so. Some years you may need to use more of your HSA contributions than other years. Just remember, there's no yearly minimum you have to spend from your HSA and your entire HSA automatically rolls over each year.
What happens if I contribute to my HSA after age 65?
If you are not enrolled in Medicare and are otherwise HSA eligible, you can continue to contribute to an HSA after age 65. You are also allowed to contribute the $1,000 catch-up. If you signed up for Medicare Part A and now want to decline it, you can do so by contacting the Social Security Administration.
At what point should I stop contributing to my HSA?
If you are retiring at the age of 65 ½ or older, to avoid potential tax issues, you want to STOP YOUR HSA CONTRIBUTIONS so that you have 6 months of NO contributions before you FILE FOR MEDICARE.
Why does Medicare Part A go back 6 months?
Beginning in 1983, the Department of Health and Human Services (HHS) started backdating Medicare coverage retroactively for six months to ensure that people coming off employer-sponsored health coverage would not inadvertently find themselves uninsured while transitioning to Medicare.
At what age can you no longer contribute to an HSA?
If you work beyond age 65 and defer Medicare, however, you will need to stop contributing to your HSA six months prior to receiving Social Security. Once you begin drawing Social Security after your full retirement age, you are required to have Medicare coverage and can no longer contribute to an HSA.
Does it make sense to contribute to HSA after retirement?
Post-Retirement Contributions
Someone who wants to keep making contributions after retirement can do so by either not enrolling in Medicare or by withdrawing from the program. While rare, both are options. However, it is unlikely that this would make sense financially.
Can HSA be used for dental?
Yes, you can use a health savings account (HSA) or flexible spending account (FSA) for dental expenses.