Medicare, HSA, Contributions for a married couple in the year they both turn 65

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GreenGrowTheDollars
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Joined: Fri Dec 18, 2015 11:09 pm

Medicare, HSA, Contributions for a married couple in the year they both turn 65

Post by GreenGrowTheDollars » Tue May 14, 2019 12:25 pm

DH will turn 65 in September 2020. I will turn 65 in October 2020. We both have HSA accounts. Neither of us will be claiming SS at that time. We will both elect Medicare at the time we turn 65.

From January - August we will both be covered by a HDHP that is HSA-compatible.
==> I think we can contribute 8/12ths of the maximum regular HSA-contribution split as we like between either of our accounts.
==> Can DH contribute $1K catch-up, or only 8/12's of $1K catch-up?
==> Even though DH doesn't turn 65 until later in the month of September, it looks like Medicare coverage is retroactive to the 1st of the month in which he turns 65? (So, we will not need to keep COBRA coverage for him that month.)

Since I will have HDHP COBRA coverage for one additional month, do I get to contribute anything extra to my HSA for that 9th month? (We will do the family contribution for months 1-8.) How much? (It won't be family coverage for that last month, just individual coverage.)

If there is a calculator that helpful for this, I'd appreciate a link to it. We'd like to stuff the max allowable into the HSA.

mhalley
Posts: 7779
Joined: Tue Nov 20, 2007 6:02 am

Re: Medicare, HSA, Contributions for a married couple in the year they both turn 65

Post by mhalley » Tue May 14, 2019 12:32 pm

My understanding is that the catchup is prorated also. In order for the second spouse to contribute the catchup amount, it needs to go in their hsa, not the family one.
I don’t see a calculator, but the formula is
Annual Contribution Limit ÷ 12 months × number of eligible months = Prorated Contribution
Last edited by mhalley on Tue May 14, 2019 12:38 pm, edited 1 time in total.

Big Dog
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Joined: Mon Sep 07, 2015 4:12 pm

Re: Medicare, HSA, Contributions for a married couple in the year they both turn 65

Post by Big Dog » Tue May 14, 2019 12:33 pm

he gets 8/12ths for both regular and catchup

you get 9/12ths for both regular and catchup, but the delta has to be in your name. (my wife has her own HSA at Fidelity for this sole purpose.)

btw: assumes that neither birth day is the first of the month.

cas
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Joined: Wed Apr 26, 2017 8:41 am

Re: Medicare, HSA, Contributions for a married couple in the year they both turn 65

Post by cas » Tue May 14, 2019 12:46 pm

GreenGrowTheDollars wrote:
Tue May 14, 2019 12:25 pm
If there is a calculator that helpful for this, I'd appreciate a link to it.
Not exactly a calculator, but here is the official IRS worksheet for calculating HSA contributions (see page 4):

https://www.irs.gov/pub/irs-pdf/i8889.pdf (see page 4 for the worksheet and page 3 for the instructions/examples)

TropikThunder
Posts: 1959
Joined: Sun Apr 03, 2016 5:41 pm

Re: Medicare, HSA, Contributions for a married couple in the year they both turn 65

Post by TropikThunder » Tue May 14, 2019 1:35 pm

GreenGrowTheDollars wrote:
Tue May 14, 2019 12:25 pm
DH will turn 65 in September 2020. I will turn 65 in October 2020. We both have HSA accounts. Neither of us will be claiming SS at that time. We will both elect Medicare at the time we turn 65.

From January - August we will both be covered by a HDHP that is HSA-compatible.
==> I think we can contribute 8/12ths of the maximum regular HSA-contribution split as we like between either of our accounts.
==> Can DH contribute $1K catch-up, or only 8/12's of $1K catch-up?
==> Even though DH doesn't turn 65 until later in the month of September, it looks like Medicare coverage is retroactive to the 1st of the month in which he turns 65? (So, we will not need to keep COBRA coverage for him that month.)

Since I will have HDHP COBRA coverage for one additional month, do I get to contribute anything extra to my HSA for that 9th month? (We will do the family contribution for months 1-8.) How much? (It won't be family coverage for that last month, just individual coverage.)

If there is a calculator that helpful for this, I'd appreciate a link to it. We'd like to stuff the max allowable into the HSA.
All things Medicare and HSA related use the 1st of the month as eligibility start points. DH is Medicare eligible and no longer HSA eligible as of Sep 1, so it’s correct that he can make 8/12’s of the contribution limit. For you, it’s as of Oct 1 and you can make 9/12’s (the $1,000 catch-up is prorated too). COBRA coverage counts as HSA eligible coverage when it’s a continuance of an HSA-eligible plan.

You’ll have to pay attention to the worksheet when you calculate your contribution limit, since the limit for you will change in September. The two of you can make combined contributions up to 8/12’s of the Family limit plus catch-up contributions, allocated as you wish between the two accounts with the caveat that catch-up contributions have to go in that person’s account. Once DH goes on Medicare on Sep 1, you will then get to make an additional 1/12 of the Individual limit plus catch-up to reflect your single month of Individual coverage. It all sounds like a lot of math, but the contribution worksheet linked above does walk you through the whole thing.

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