What happens to my HSA when I become eligible for Medicare?
Once you become eligible for Medicare, seniors cannot continue contributing money in their HSA. But consumers can still use the HSA funds tax-free on medical expenses including premiums, deductibles and prescription drugs. What happens if I become eligible for Medicare during the middle of the year?
Can I take money out of my HSA?
You can also take money out of your HSA to reimburse yourself for qualified medical expenses that you incurred—but did not pay for from your HSA—at any point after the account was established, says Atlanta financial planner Jason Lina.
Will Medicare affect my wife's HSA contributions?
Since Medicare is individual, and the HSA contributions are from your wife, your enrollment into Medicare will not impact her contributing to the HSA. You will not see any tax penalties. You are correct, once she is enrolled in Medicare then she will need to stop contributing to the HSA.
What happens to the money in my HSA after I turn 65?
What Happens to the Money In My HSA Account After Turn 65? You can continue to use your account tax-free for out-of-pocket health expenses. When you enroll in Medicare, you can use your account to pay Medicare premiums, deductibles, copays, and coinsurance under any part of Medicare.
What happens to my HSA account when I turn 65?
At age 65, you can take penalty-free distributions from the HSA for any reason. However, in order to be both tax-free and penalty-free the distribution must be for a qualified medical expense. Withdrawals made for other purposes will be subject to ordinary income taxes.
Can I use HSA money while on Medicare?
A: You can still use your HSA funds if you have Medicare coverage. You may withdraw funds from your HSA at any time, regardless of whether you are eligible to contribute to your HSA.
Why can't Medicare recipients have an HSA?
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.
How do I use my HSA to pay Medicare premiums?
Unfortunately, you cannot pay Medicare Supplements premiums using HSA funds. Medicare Supplement premiums, or Medigap premiums, are one of the only Medicare plan types that you cannot pay for using HSA funds (Publication 969, 2020). In sum, Medicare Supplement premiums are not considered a qualified medical expense.