Edward is approaching 65. He’s accumulated a hefty balance in his Health Savings Account. Let’s review how HSA’s may (or may not) integrate with Medicare.

For starters, can Edward (or his employer) continue to contribute to his HSA?  Once enrolled in any part of Medicare (A or B), the answer is no.

But, what if he continues to work past age 65; can he opt out of Medicare?

Medicare Part B (covering provider charges and outpatient care) has a monthly premium. If you are actively at work for an employer that provides group coverage, you can delay without penalty Part B enrollment (and those premiums).

For most people, there’s no premium for Medicare Part A (covering hospitalizations), so except for limited situations - for example, for those individuals who wish to continue HSA contributions - enrollment is recommended. If Edward works for a small employer (one with <20 employees), his health plan benefits are paid as if Medicare is primary; i.e., he must enroll in Medicare.  

All things considered, Edward decides to continue working and opt out of Medicare.

Fine.

Next week, a word of caution and ways Edward can use his HSA post retirement.

[Medicare Fact Sheet HERE]