Reduced HSA contribution limit due to secondary Medicare

[taxQQQQQ]

I have HDHP coverage for my family and HSA for the entire 2020. I have Medicare (Plan A only) as secondary insurance for the month of November and December for myself only. It is applicable to me due to a medical condition for the next 36 months, not because of my age.

By selecting "None" in the "Type of HDHP Coverage" for the last two months, it reduced the annual HSA contribution limit. If I continue to have HDHP as a primary and Medicare Plan A as a secondary for the entire 2021, am I going to have $0 HSA contribution limit? Medicare Part A only covers inpatient hospital stays, thus most of the medical cost is still covered by HDHP.  With zero HSA contribution limit, I think it will increase tax for next year. Any way to have the HSA contribution limit even with Medicare? 

[BillM223 · Accepted solution]

"By selecting "None" in the "Type of HDHP Coverage" for the last two months, it reduced the annual HSA contribution limit." - this is correct. You should have 10/12ths of the annual HSA contribution limit for your type of HDHP coverage for 2020.

"If I continue to have HDHP as a primary and Medicare Plan A as a secondary for the entire 2021, am I going to have $0 HSA contribution limit? " - Yes, you will, so long as you have Medicare.

However, may I assume that you are married? If so, then your spouse can open an HSA (HSAs belong to the individual, not jointly) so long as your spouse does not have conflicting coverage. That is, if your spouse is covered by the Family HDHP plan and does not have conflicting coverage (like employer insurance), then your spouse can open an HSA.

In fact, if your spouse can he/she OUGHT to open an HSA. So long as your spouse's name is on that HDHP policy (even if you are the primary), then he/she is eligible to contribute to an HSA. 

Then it will not matter that you have Medicare. The HSA contribution limit is by each HSA and its owner. If your spouse has Family HDHP coverage and no conflicting coverage (because your Medicare does not cover your spouse), the your spouse can just resume making contributions to his/her HSA like you did before for your HSA. And your spouse can spend money for qualified medical expenses on both of you and dependents.

Make sense?

[taxQQQQQ]

Thanks for your advice BillM223. My wife who is under my HDHP only, opened her own HSA account. If my understanding is correct, this will give us HSA contribution limit for 2021 even without making contribution to her HSA.