What You Need to Know About HSAs and Medicare
A Health Savings Account (HSA) allows you to save money to spend towards future health expenses. Typically, an HSA is paired with a health insurance plan with a high deductible. Contributions to your HSA and deductions from your HSA (assuming the money is to be spent on health-related expenses) are tax-free. Unlike Flexible Spending Accounts (FSA), you are able to keep your HSA as you move from one employer to another or retire.
Signing up for Part A, however, prohibits you from contributing to your HSA tax-free so, if you’re turning 65 or are retiring, this is something to keep in mind. Once you sign up for Part A, there is a 6-month look-back period in which you will be taxed for any contributions made to your HSA.
What You Can Do
If you like your HSA and are fully covered under an employer, you can delay signing up for Part A until you’ve retired, regardless of your age. You do not need to fill out any forms or make any calls in order to delay signing up for Part A - simply do not do anything.
If you would like to sign up for Part A while employed or need to sign up due to retirement and you have an HSA, keep in mind the 6-month look-back period.