Medicare Question
My husband will turn 65 in January 2025 and will still be working. He has a HSA that is totally funded by the union, he makes no contributions to the Account. I am getting conflicting answers from the Union Benefit department and an online chat I had with Medicare. The Union says since it is a benefit that he does not contribute to, it can continue even if he signs up for Medicare. The person on the Chat says no. I know I should believe the Medicare agent but…. Assuming the Chat is correct, and it is beneficial to continue the “free money” from the union can he opt out of Medicare (any part) without penalties? Do you know the process to do that? Thanks!
Terry Says
Unless his union health insurance requires signup for Medicare Part A, he can avoid signing up and this will be a moot point. Once he signs up for Part A, the law says he can no longer “contribute” to an HSA. Read this: https://www.journalofaccountancy.com/issues/2021/jul/medicare-rules-on-hsa-after-age-65.html
But his union insurance must be considered an employer-based plan, under the definition of the Medicare laws. Ask the union if they are considered a VALID alternative to Medicare, and confirm that they do not require signup for even Part A, before dealing with this issue. Get it in writing from the union.
If they require Part A, you likely can no longer accept their contributions to their HSA. Icould not find anything that distinguishes employer contributions from individual contributions.
More interesting reading on the subject:
https://www.medicareinteractive.org/get-answers/coordinating-medicare-with-other-types-of-insurance/job-based-insurance-and-medicare/health-savings-accounts-hsas-and-medicare
You don’t want to get into a debate with Medicare down the road about the employer contributions. It could invalidate ALL the savings he built up in his HSA! And trigger penalties on those non-allowed contributions.
