3 facts for those enrolling in Medicare who have a Health Savings Account (HSA)

Are you approaching 65 and planning on enrolling in Medicare? 

Are you also participating in a consumer choice health plan and contributing to a health savings account (HSA)? 

If you answered yes to both questions, here are some facts to consider:

• Once you are enrolled in Medicare, you must stop contributions. Those enrolled in Medicare are no longer eligible to contribute to an HSA. Contributions made after enrolling are not deductible and subject to an excise tax.
• You can withdraw funds from the HSA for eligible medical expenses including premiums for Medicare Parts B, medical insurance, and Part D, prescription drug coverage, and a Medicare Advantage plan, along with deductible, copayments, and coinsurance for medical care and medications. 
• You cannot use funds from an HSA to pay premiums for Medicare supplement insurance, also known as a Medigap policy.

A special concern for those who delay Medicare enrollment: If you enroll after the age of 65, Social Security can backdate the date Medicare takes effect. Consider stopping contributions six months before the date you apply for Medicare.