Medicare DeadlinesGet my dates

HSA and Medicare: the last month you can contribute

You can't put money into a health savings account for any month you have Medicare. When you sign up after 65, Part A can be backdated, so the last safe month can come well before you retire.

Work out your last HSA month

What's your date of birth?

Every deadline is counted from it.

Are you getting Social Security benefits yet?

If you are, Medicare signs you up automatically.

The rule

From the first month you’re enrolled in Medicare, your HSA contribution limit is zero. That includes months of backdated Medicare coverage: if you apply late and your enrollment is backdated, anything put into your HSA for those months counts as an excess contribution. Contributions from your employer count too.

Source: IRS Publication 969 (HSAs)

Why the last month comes early

When you sign up for Medicare after 65, or apply for Social Security benefits, Part A can start up to 6 months before you apply. So Medicare.gov says you and your employer should stop contributing 6 months before you retire or apply for Social Security. The calculator counts back from when you’d apply, and never to before the month Medicare counts you as turning 65.

Source: Medicare.gov: Working past 65 · IRS Publication 969 (HSAs)

The year Medicare starts

Your limit for that year is cut to the months before Medicare. IRS Publication 969’s example: someone who turns 65 in July and enrolls in Medicare can contribute 6/12 of the yearly limit. Your HSA provider can confirm your amount.

Source: IRS Publication 969 (HSAs)

If you’ve already put in too much

Excess contributions aren’t deductible, and there’s generally a 6% tax on them for each year they stay in the account. You can avoid that tax by withdrawing the excess, and any earnings on it, by the due date of that year’s tax return, including extensions. Report the earnings as other income.

Source: IRS Publication 969 (HSAs)

You can still spend it

Stopping contributions doesn’t close the account. Once you’re 65, you can use it tax-free to pay Medicare premiums, except premiums for a Medicare supplement (Medigap) policy.

Source: IRS Publication 969 (HSAs)

Still working past 65?

Coverage from a current job at an employer with 20 or more employees can let you put off Medicare, and so keep contributing. If you choose COBRA when the job ends, your Medicare deadline doesn’t move: see COBRA and Medicare.

Source: Medicare.gov: Working past 65 · Medicare.gov: COBRA coverage

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