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November 13, 2011
How Health Savings Accounts Work With Medicare
Once you are enrolled in Medicare, you are no longer eligible to contribute to your Health Savings Account, but that doesn't mean it's any less valuable.
If you plan to continue working and remain on your employer’s health plan after you are eligible for Medicare, you can continue to make Health Savings Account contributions until you enroll in Medicare. Even Medicare Part A benefits, which are typically free, will disqualify you from being able to make Health Savings Account contributions though.
Once you are 65, you’re free to spend Health Savings Account (HSA) money as you see fit. You can continue to withdraw funds tax free to pay for eligible health care, and that includes Medicare co-pays and deductibles. You can also use HSA money for other purposes with no HSA penalty, but you will have to pay taxes on the withdrawal.
If your spouse enrolls in Medicare before you and is not covered by your health insurance, you can still pay for your spouse’s health care with HSA funds. You can also spend your HSA on health care for your dependents, even if they are not covered by your health insurance. For more information on how to use HSA plans, please see our HSA Information page.
Posted by Wiley Long at November 13, 2011 10:30 AM