HDHP Coverage by my employer the entire year, and signed up for Medicare Part A only

[aalanykr]

I signed up for Medicare Part A, which started the month I turned 65 (June 2023).  However, I am still employed and have full insurance coverage from my employer, which I am still contributing to.  I'm not sure if I should select 'Self Only' for the full 12 months in 2023, OR only up until May of 2023, and then select Medicare or None from June until December, even though I only have Medicare Part A.  Can someone please advise?

[Opus 17]

Medicare disqualifies you from making contributions to an HSA, even if you still have HDHP coverage.  You should select "self only" (if you had a self-only HDHP) for January-May, and select "Medicare" for the rest of the year. 

Your HSA limit for 2023 will be $2020 ($4850÷12 months x 5 months).  If you contributed more than $2020, you will have to remove that excess contribution before April 15, or pay a 6% penalty. 

[aalanykr]

Hello, thank you for your response.  I contributed no where near $2020 in 2023 to my HSA, so I should be fine.  So, you are saying that even though I am still fully covered by my employer and stopped contributing to the HSA in June when I turned 65, that I should only select 'self only' for Jan thru May and Medicare for June thru December, even though it's only Medicare Part A and I don't even use it?

[PaulaM]

Yes even if you don't use Medicare Part A or B you are no longer eligible to contribute to an HSA. This is because you cannot have any other insurance besides an HDHP.

Opus17's directions regarding the months selected for self-only is correct. 

[aalanykr]

Hi, got it.......thank you all so much for your feedback.  I appreciate it.

[Opus 17]

---

@aalanykr wrote:

Hello, thank you for your response.  I contributed no where near $2020 in 2023 to my HSA, so I should be fine.  So, you are saying that even though I am still fully covered by my employer and stopped contributing to the HSA in June when I turned 65, that I should only select 'self only' for Jan thru May and Medicare for June thru December, even though it's only Medicare Part A and I don't even use it?

---

Correct.  You are not eligible to contribute to an HSA if you have "other coverage", even if you don't use that other coverage.  And you are still allowed to spend money from your HSA for qualified medical expenses (now or in the future) even if you are no longer eligible to make contributions.  

[JayFH58]

SS signed me up for Medicare and back dated it to April and I have been contributing all year.  Can you opt out of Medicare?  I plan on continuing to work and have good insurance HDHP and my company matches.

[DoninGA]

---

@JayFH58 wrote:

SS signed me up for Medicare and back dated it to April and I have been contributing all year.  Can you opt out of Medicare?  I plan on continuing to work and have good insurance HDHP and my company matches.

---

Go to this Medicare website for information on how drop Medicare Parts A and B - https://www.medicare.gov/basics/get-started-with-medicare/sign-up/ready-to-sign-up-for-part-a-part-b...

[Mike9241]

see this link. generally, there are no premiums for just part A and if you delay signing up once you're 65 there can be penalties for signing up later

there is nothing improper about being covered by part A Medicare and an HDHP or any othe type of health plan. 

https://www.medicare.gov/basics/get-started-with-medicare/medicare-basics/what-does-medicare-cost#:~... 

[Opus 17]

---

@JayFH58 wrote:

SS signed me up for Medicare and back dated it to April and I have been contributing all year.  Can you opt out of Medicare?  I plan on continuing to work and have good insurance HDHP and my company matches.

---

You can carry part A and your company plan, unless your company has a policy preventing it.  It's just that your HSA contributions are limited for this year and disallowed in the future.  There is a procedure to remove the excess HSA contributions without penalty.

Even if you can opt out of Medicare once started, I don't know if that would be retroactive, allowing you to remain eligible to make HSA contributions.  That would require expert knowledge above my level, and may not be worth the audit risk.  Just take the money you would have invested in the HSA and put it in a Roth IRA or into your 401k instead.