Yes, but you can’t. Input to a Health Savings Account (HSA) after enrolling in Medicare.
You can use the money you’ve already raised tax-free in the account for eligible medical expenses at any time. After you turn 65, you can even withdraw tax-free money from your HSA to pay your Medicare premiums.
HSA is a tax-advantaged way to save medical expenses out of pocket. Your contributions are tax deductible. Or, if you participate through your employer, contributions are deducted before withholding income tax.
Money grows tax-deferred in the account. And you can withdraw it tax-free for eligible health care expenses in any year.
In 2022, you can contribute to an HSA if you are not enrolled in Medicare and have an HSA-qualified health insurance policy with a deductible of at least $1,400 for just yourself or $2,800 for family coverage. This is true whether you get insurance through your employer or on your own.
When should I stop contributing to Hayel Saeed Anam?
You can contribute to an HSA for as long as you want if you are not enrolled in Medicare and have an eligible HSA insurance policy. However, after you sign up for Medicare, you cannot make new contributions. And if you’re on Medicare, your employer won’t be able to add to the HSA either.
You must stop contributing to an HSA beginning in the first month in which you are enrolled in Medicare Part A or Part B, even if you also have a policy for the High Deductible through Employment. If you enroll in Medicare midyear, you may be able to make split contributions based on the number of months you had a qualifying health insurance policy before your Medicare program took effect.
For example, if your Medicare coverage begins on July 1, you can make half of the year’s contribution to the HSA. If you are 55 or older in 2022, the full-year contribution is $4,650 for individual coverage or $8,300 for family coverage. In this case, you can contribute up to $2,325 for the year if you have individual coverage or $4,150 for family coverage. You have until the April 15, 2023 tax filing deadline to contribute in 2022.
What are the tax deductible expenses after I am in Medicare?
at what age You can withdraw your tax-free HSA money to pay health insurance deductions, co-payments, dental care, hearing care, over-the-counter medications, vision needs and other eligible health care expenses that aren’t covered by insurance.
You can also withdraw tax-free money from your HSA to pay a portion of your qualifying long-term care insurance premiums based on your age. You can withdraw up to $4,510 for long-term care premiums in 2022 if you are 61 to 70 years old and $5,640 if you are over 70. Husband/wife can withdraw up to this amount as well, based on his/her age. Eligible withdrawal limits for long-term care premiums are smaller at younger ages.
After turning 65 years old, You can also withdraw tax-free money from your HSA to pay Medicare Part B premiums, Part D prescription drug coverage, and Medicare Advantage plans, but not Medicare supplemental plans, also called Medigap. You can also pay your Part A premiums with HSA money if you or your spouse have not worked long enough to be eligible for premium-free Part A coverage.
If you have premiums paid directly from your Social Security benefits, you can withdraw tax-deductible money from your Social Security account to reimburse yourself for these expenses. Just remember to keep records of costs.
before age 65 If you use HSA funds for non-medical expenses, you will have to pay taxes and a 20 percent penalty on withdrawals. The penalty disappears at age 65, but you must still pay taxes on withdrawals not earmarked for qualifying medical expenses. So to avoid the tax bill, look for eligible expenses, such as Medicare premiums, when making withdrawals to avoid the tax bill.
to remember
You may have a deadline later. Some people who are still employed at age 65 for an employer with 20 or more employees choose to defer enrolling in Medicare, Part A and Part B, so that they can continue to contribute to the HSA. But when you leave this job, you will need to enroll in Medicare within eight months of losing health insurance or you will have to pay late enrollment penalties when you enroll in Part B.
If you work for a small business owner, With fewer than 20 employees, you usually have to enroll in Medicare at age 65 because Medicare generally becomes primary coverage and employer coverage secondary. If you don’t enroll in Medicare, you may have significant coverage gaps.
Do you already receive Social Security? If you are getting Social Security benefits, you will automatically be enrolled in Part A and have no option to delay.
Another warning: If you sign up for Part A after the month you turn 65, Part A coverage can start up to six months retroactively but not before your birthday month. Consider the retroactive coverage history when calculating how much you can contribute to an HSA for the first year.
In the example above, if you enroll on July 1 for Medicare and Part A coverage goes into effect on January 1, you cannot make any HSA contributions for that year.