If you are 65 and you are going to continue to work and your employer has more than 20 employees, you do not have to enroll in Part A or B. Your employer’s health coverage is primary, so Medicare is not required, and there will be no penalties assessed. If your employer has fewer than 20 employees, Medicare is primary, and you must enroll in Medicare Part A & B to protect against penalties.
Can I still contribute to an HSA?
An 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.
Many people turning 65 who continue to work consider getting Medicare Part A since it’s premium-free. But, as stated above, once you enroll in Part A, you can’t make any more pre-tax contributions to your HSA. If you plan to keep working and want to continue building your HSA up, check to see if you’re eligible to delay Medicare enrollment. However, if you receive Social Security benefits, Medicare Part A is mandatory.
Even after you enroll in Medicare and stop HSA contributions, you are still able to withdraw funds tax-free for qualified medical expenses. You can even use your HSA to pay for some Medicare expenses, including your Medicare Part B, Part D, and Medicare Advantage plan premiums, deductibles, copays, and coinsurance.
In addition to the traditional Medicare expenses, your HSA may also be used to cover a number of items and services that may not be covered by your Medicare plan. This may include long-term health care coverage; expenses for dental, hearing, or vision care; and other costs the IRS deems qualified medical expenses.
This blog was co-authored by:
Sharon Accardo, Medicare Professional, sharon@thinkinnovative.net and
Albert Wu, CERTIFIED FINANCIAL PLANNER® albert.wu@vocarewealthadvisors.com
Any opinions are those of Vocare Wealth Advisors and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. Prior to making an investment decision, please consult with your financial advisor about your individual situation.
The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation.
Raymond James is not affiliated with and does not endorse the opinions or services of Sharon Accardo.
