HSA Contributions

[dungbum]

1.  I am current working and have HDHP at my employer that cover both my wife and I

2.  I will turn 65 on 2/2/25 and plan to apply for medicare part-a on 1/1/25.  In addition, I also plan to stop hsa contributions in 2025 and will stop working by the end of the year (12/31/25).

Here's my questions, can my wife open her own hsa account in 2025?

 Thanks,

--dtn

[Mike9241]

she needs to be cover by a HDHP in 2025. 

Your Medicare coverage only affects your ability to contribute to your HSA. 

[NCperson]

@dungbum as long as she remains covered by your employer as that employer provides for a high deductible plan, then it would work.  However, she needs to have an HSA SINGLE plan separate from your HSA.  (i.e. she can't be contributing to your plan).  She would be able to contribute $4300 (2025 limit) plus $1000 if she is over 55 years old. 

[Opus 17]

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@NCperson wrote:

@dungbum as long as she remains covered by your employer as that employer provides for a high deductible plan, then it would work.  However, she needs to have an HSA SINGLE plan separate from your HSA.  (i.e. she can't be contributing to your plan).  She would be able to contribute $4300 (2025 limit) plus $1000 if she is over 55 years old. 

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No.  If she is covered by a family HDHP, her HSA contributions follow the family limit.

[Opus 17]

If your medicare coverage starts on 2/1/25, then your maximum eligible HSA contribution for 2025 is 1/12th of $8550 plus 1/12th of the $1000 catch-up, for a total of $795 ($712 plus $83).  This contribution can be made any time in 2025, even after medicare enrollment starts, as long as you don't go over your eligible limit for the year.

If your wife is covered by your family HDHP for all of 2025, and has no other disqualifying coverage, then her HSA contribution limit is $8550 plus $1000 catch-up if she is age 55 or older.  The $8550 limit is shared between you, so if you contribute your maximum of $712, then her maximum from the shared limit is reduced to $7838.  The $1000 catch-up is individual, so she can contribute $1000 for catch-up even if you also contribute your $83 catch-up.  So her ultimate limit will be between $7838 and $9850, depending on her age and what you contribute.

If you drop your HDHP coverage with your employer and your wife is only covered by an individual HDHP, her limits are about half what I wrote above.  But I think this is unusual, most businesses require you to keep family coverage in order to cover a spouse.  

Also, note that her limit depends on the number of months where she is covered by a family HDHP on the first day of the month.  If you terminate on or after December 2, then she has 12 months of eligibility, but if you terminate on November 30, she will have 11 months of eligibility and her limit would be adjusted accordingly. 

Lastly, if she is over age 55 now, she can open an HSA in 2024 and contribute her $1000 catch-up contribution for 2024, even if you have maxed out your shared family contributions.  

[NCperson]

@dungbum it does beg the question, why are you applying for Part A if you are eligible to maintain your private medical insurance?  there is no cost to Part A in most instances and there no penalty for applying for Part A when you finally retire and lose your private insurance? 

[Opus 17]

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@NCperson wrote:

@dungbum it does beg the question, why are you applying for Part A if you are eligible to maintain your private medical insurance?  there is no cost to Part A in most instances and there no penalty for applying for Part A when you finally retire and lose your private insurance? 

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Remember that if the taxpayer's birthday is 2/2/25, and they delay their enrollment until they stop working on 12/31/25, their Medicare will still be backdated to 6/1/25, so they would only save 3 months worth of premiums.   Also, some employers give their employees a break on price if they enroll in Medicare when eligible and keep the workplace coverage as secondary.  

In any case, the wife's contribution limit is determined by how she is covered, whether single or family.

[NCperson]

@Opus 17 @Opus 17 - in the example, if you retire 12/31/25, I agree that HSA contributions would have had to stop back in June (6 months prior), but presuming you had private medical insurance through 12/31/25, Medicare would begin charging premium effective 1/1/26.   There is no retroactive billing of premium (I went through this exact scenario myself), but as I recall you must apply for Medicare in a three month window post the date you lose private medical insurance to avoid any penalties for late enrollment.