If you’re working, have employer group health coverage, have a high deductible plan with a Health Savings Account (HSA), and are going to be 65 or older, take note. Special rules apply regarding Medicare and your ability to continue contributing to the HSA.
For example, if you have Medicare Part A you can no longer make pre-tax contributions to your HSA, although you can spend the amount already in your account. If you are receiving Social Security retirement benefits you will automatically be enrolled in Part A and cannot opt out, so you should stop your HSA contributions before you turn 65. Also, if you apply for SSA benefits after age 65, you will be enrolled in Part A retroactively to six months before the date that your SSA benefits start. This could cause you to owe taxes on any HSA contributions you made during that six-month period.
It is complicated. Check with your HR department and with Social Security to better understand the rules well before you apply for SSA benefits or Part A.
Contact HICAP for more information.