– – Recorded Hotline: 1-800-958-8171 – Office: 1-800-825-2919. – – Email: [email protected] – – PS: No Sales Pitches Ever! We hate'em as much as you do!
In this video, we are going to cover how enrolling in Medicare can disqualify your HAS or Health Savings Account.
Medicare enrollment disqualifies you for HSA contributions. But if your company employs 20 or more people, you can postpone Medicare enrollment without incurring a penalty.
Your HSA contributions are tax-deductible, earnings are tax-free, and your distributions are tax-free if used for qualified medical expenses. But your HSA must be coupled with a high-deductible health insurance policy.
However, when you get other coverage — like Medicare — it ends your contribution eligibility. Any subsequent employer contribution is added to your taxable income and is subject to a 6 percent annual excise tax until you remove it from your HSA.
But your Medicare sign-up deadline depends partly on where you work. If your company employs fewer than 20 people, your penalty-free Medicare enrollment window closes three months after your 65th birthday.
If your employer has 20 or more workers, that window stays open until eight months after you leave your job or lose coverage in your employer’s plan, whichever comes first.
Two situations to watch out for: If you apply for Social Security after age 65, you are automatically enrolled in Medicare. And if you apply when you’re six months or more past your full retirement age, let’s say at 66 1/2 or older — your Medicare coverage is backdated by six months. This being your situation, be sure to stop contributing to your HSA six months before you apply for Social Security.
Even if you don’t have an HSA, triple-check your Medicare enrollment deadline as you near age 65. Missing it means a permanently higher premium, and could leave you temporarily uninsured.
If you need additional information about your HAS and Medicare give our office a call on our Recorded Hotline. That number is 1-800-958-8171 and then record your question or request.
Again, the best way is to call my office direct at 1-800-825-2919. You’ll get an answer to point you in the right direction.
If you’re not comfortable with calling – send us an anonymous email to [email protected].
