What is the penalty for having an HSA and Medicare?
Your contributions after you're enrolled in Medicare might be considered “excess” by the IRS. Excess contributions will be taxed an additional 6 percent when you withdraw them. You'll pay back taxes plus an additional 10 percent tax if you enroll in Medicare during your HSA testing period.
Can you have a health savings account and Medicare?
Yes. Medicare doesn't offer an HSA qualifying option. You can't make contributions to your HSA for any months after you enroll in any part of Medicare, even if you're also covered on an HSA qualifying plan.
Do husband and wife need separate HSA accounts?
If you and your spouse each have HSA-eligible insurance coverage, and you both plan on contributing to your HSAs, you must have separate accounts. This is true even if you're both covered by the same high-deductible health plan (HDHP).
Can I participate in an HSA if I have Medicare Part A?
No. Once you enroll in Medicare Part A and/or B, you can no longer setup or contribute pre-tax dollars to an existing HSA. This is because to contribute pre-tax dollars to an HSA you cannot have any health insurance other than a HDHP.
Can I have a family HSA if my 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.
Can I use my HSA to pay for my spouse Medicare premiums?
No. If you are the HSA owner and your spouse turns 65 before you, the funds in it cannot be used for your spouse's Medicare premiums.
Can both my spouse and I have an HSA?
Both spouses are eligible to have their own HSA and contribute to the federal limit. Neither spouse is eligible to contribute if Spouse 1 is covered under Spouse 2's non-HDHP Plan. Spouse 1 may contribute up to the individual federal limit in an HSA if NOT covered under Spouse 2's non-HDHP Plan.
Can you have 2 HSA accounts at the same time?
As long as you have an HSA-eligible health plan, there's no limit on how many HSAs you can have. As far as the IRS is concerned, the only limit is how much money you can contribute to your HSAs each year. You can contribute it all to one HSA, or spread it out across two or more accounts.
Can you have dual coverage with an HSA?
If your employer and your spouse's employer both offer HDHPs, you can opt for double coverage and still contribute to your HSA.]
Family Coverage vs Individual Coverage
How It Works
- Let’s look at one example: Annie has individual-only HMO coverage with her employer. Annie is not eligible to make HSA contributions. Annie’s spouse, Bob, participates in a qualified HDHP at work and enrolls in family coverage. Bob may contribute up to the family coverage maximum to his HSA, and may also use his HSA funds to pay Annie’s eligible medical expenses. In this situati…
Spouses Who Work For The Same Employer
- If both an employee and his or her spouse work for the same employer, there are specific regulations about contributions that can get confusing. Under current rules, two spouses may not both contribute to asingleHSA via payroll deduction. Since HSAs can be used to pay for eligible medical expenses for a spouse and dependents regardless of what type...
How to Prevent HSA Rule Breaking
- Many times, HSA rule breaking can be avoided by learning each family’s situation. During enrollments, ask the following questions to help raise red flags: 1. Does an employee or his or her spouse have family coverage for a qualified HDHP or another medical plan? 2. Does an employee or his or her spouse already have a HSA? How do they plan on contributing? One of the ways Am…