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HSA & Medicare

Frequently Asked Questions Regarding Medicare and Health Savings Accounts

How to Defer Part A with an HSA – 1m 52s

As you approach age 65, it is important to understand how your eligibility for Medicare may impact your Health Savings Account. IRA Rules state that once you are enrolled in Medicare, you are no longer allowed to contribute to an HSA. 

If you enrolled in Medicare Part A (not realizing the impact on the use of your HSA)  you may be able to dis-enroll if you act quickly. 

If you have applied for or are receiving Social Security benefits, you are automatically enrolled in Medicare Part A and cannot contribute to an HSA. 

  • If you withdraw/dis-enroll in Part A after turning 65, you are required to pay back all of the money received from Social Security as well as any Medicare benefits paid.
  • If you accidentally enrolled in Medicare Part A and don’t want it, you have a short window of opportunity to withdraw your application for Medicare Part A.  You MAY have up to 12 months after your effective date to withdraw, but we have found that it really depends on who you work with at your local Social Security office.
  • To withdraw your application for Part A, use Form SSA 521 and submit to Social Security.

CMS Reference: For additional information, please scroll down to “Termination of Enrollment”

Read More from AARP

Retirement warning- 6 month backdating rule

Even if you deferred your Medicare at age 65, when you enroll in Medicare later (after age 65), your enrollment in Part A will be backdated by six months (but no earlier than the 1st of the month of your 65th birthday).  Under IRS rules, that leaves you liable to pay six months’ of tax penalties if you over-funded your HSA for that tax year.  To avoid the penalties, you cannot contribute more than the prorated maximum into your HSA for the tax year in which you apply for Medicare Part A (see below).

Read More from AARP

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