Medicare & Health Savings Accounts: What Employers Need to Know TopicsPopular TopicsMost Recent Medicare Working Past 65 Lifestyle & Wellness Considering Retirement Existing Clients Many employers offer their employees a health savings account (HSA) as part of their health benefits. But did you know that employees can also use HSA funds to pay for Medicare expenses when they enroll? For your employees nearing Medicare eligibility, here’s what they should know regarding their HSA funds. Health Savings Account Contributions An HSA is a financial account made available by employers, allowing employees to contribute nontaxable funds to pay for qualified medical expenses. If your organization currently offers HSAs, notify employees who may be considering Medicare of the regulations. By law, anyone with an HSA cannot contribute to their account once they are ready to switch to Medicare Parts A or B. This applies to both retiring employees and those who choose to work past 65 and delay Medicare coverage. Employees must stop contributing to their HSA six months prior to enrolling in Medicare Part A and/or Part B. Otherwise, they will be subject to a tax penalty. Health Savings Account Withdrawals When an employee enrolls in Medicare, they can withdraw from their existing HSA balance to pay for qualified medical costs. Examples of qualified Medicare expenses include deductibles, premiums, copays, and coinsurance associated with their Medicare plan. The HSA funds are theirs to use—not lose—even after they decide to switch from an employer group plan to Medicare. Delaying Medicare Enrollment As an employer, if you have 20 or more employees, those who choose to work past age 65 can defer Medicare enrollment. Depending on their individual circumstances, it may make more sense for some individuals to remain on their employer group plan while contributing to an HSA with pre-tax dollars, rather than enroll in Medicare at 65. Delaying Social Security If an employee defers Medicare when they are first eligible and continues on employer coverage, it impacts their ability to collect Social Security. Employees must stop all HSA contributions six months before signing up for Medicare Part A. Medicare Part A provides six months of retroactive coverage after an individual applies for Social Security benefits, assuming they were eligible for Medicare during those months. Any contributions made to their HSA will likely be subjected to a penalty. You cannot deposit to an HSA when enrolled in Medicare, even retroactively. Employers, We’re Here to Help If you have questions about how your employees can use health savings account funds in retirement, consider us a resource to you and your team. Email your questions to email@example.com or give our advisors a call at 1-866-407-5180. Stay informed about Medicare An easy way to stay updated on Medicare and any important changes is to sign up for the free, customizable RetireMEDiQ newsletter. Based on your personal preferences and interests, helpful articles and community-related content will be sent directly to your inbox. Sign up for our newsletter Yes! Tell me more about Medicare and help me explore my options.Name First Email* Date of BirthMonth123456789101112Day12345678910111213141516171819202122232425262728293031Year202120202019201820172016201520142013201220112010200920082007200620052004200320022001200019991998199719961995199419931992199119901989198819871986198519841983198219811980197919781977197619751974197319721971197019691968196719661965196419631962196119601959195819571956195519541953195219511950194919481947194619451944194319421941194019391938193719361935193419331932193119301929192819271926192519241923192219211920Phone*By entering your information, you are authorizing RetireMEDiQ to communicate with you directly regarding Medicare news and health care coverage.vidhiddenNameThis field is for validation purposes and should be left unchanged.