Does Medicare work with a Health Savings Account (HSA)?

Once you enroll in Medicare Parts A and or Part B, you can no longer contribute pre-tax dollars to your HSA, however, you can still access the funds you have saved to pay for qualified medical expenses. In order to continue contributions to your HSA, you can delay both parts of Medicare until you stop working or lose employer coverage.

You won’t pay a penalty for delaying Medicare as long as you enroll within eight months of losing your coverage or stop working. When you activate your Medicare benefits after being on an HSA, your coverage will become retroactive effective going back 6 months. You should stop making contributions to your HSA 6 months before putting your Medicare coverage into effect or you may incur a tax penalty. Please talk with your employer benefits manager about whether it makes sense to delay Medicare Parts A & B.