HSA Medical Eligible Health Plan

[cindylov3spaul]

Good Morning,
My husband has reached full retirement age. He loves his career and his company. Consequently, he plans to continue working. He would like to start receiving his Sicial Security. We know that he cannot contribute to an HSA Account. My question is can he keep his HSA eligible health plan?
Thank you in advance for your assistance in this matter.
Respectfully submitted, Cindy

[jeffyscott]

Does the employer allow it?

My (former) employer would not, they only allowed the HDHP for those who were eligible to enroll and participate in the employer sponsored HSA.

[InMyDreams]

...Consequently, he plans to continue working. He would like to start receiving his Sicial Security. We know that he cannot contribute to an HSA Account. My question is can he keep his HSA eligible health plan?

Definitely talk with benefits office.
He cannot contribute to an HSA and be covered by Medicare.
Whether he can keep employer-sponsored health insurance while eligible for Medicare may be affected by the size of his employer.

Your local SHIP office may be of assistance, also.

[cindylov3spaul]

Thank you for your prompt response.
What does SHIP mean?

[BogleTaxPro]

Thank you for your prompt response.
What does SHIP mean?

State Health Insurance Assistance Program -- https://www.shiphelp.org/
It's free counseling from trained volunteers to help us understand medicare and the various medicare options.

BTW...it's not clear to me whether your husband is medicare-eligible. Just because he's decided to take Social Security has nothing to do with HSA accounts, but Medicare does.

[cindylov3spaul]

Yes. He is at full retirement age and eligible for Medicare. My husband has amazing health insurance from his company and we want to keep it. Also, his health insurance covers me, too.
Thank you for your assistance.

[Morgan22]

Thank you for your prompt response.
What does SHIP mean?

State Health Insurance assistance Program. Google SHIP plus your state to look for your local SHIP phone number.

Some states may call SHIP different things. For instance MA calls it SHINE. But when I google, SHIP MA, it directs me to the SHINE site as the second website on the list.

[cindylov3spaul]

[Thread merged into here --admin LadyGeek]

Good Afternoon,
If my husband begins taking Social Security while working and being covered by his company's medical plan that is HSA eligible. We learned that they will go back six months with Medicare Part A. He was contributing to an HSA Account for those six months.
How much of a tax or penalty will he be charged?
Should he stop contributing for six months to his HSA Account before he begins collecting his Social Security, since he will have to take Medicare Part A when he files for Social Security?

Thank you in advance for your assistance!

[mhalley]

Did he delay claiming past age 65? If so, then part A has a six month look back. If not, part A starts the month he turns 65. There will be no tax penalty as long as he withdraws the Hsa contributions plus earnings. Your Hsa provider will have a form and procedure on how to withdraw excess Hsa contributions.
From Medicare.gov

The date your coverage starts depends on which month you sign up during your Initial Enrollment Period. Coverage always starts on the first of the month.

If you qualify for premium-free Part A: Your Part A coverage starts the month you turn 65. (If your birthday is on the first of the month, coverage starts the month before you turn 65.)

Part B (and premium-Part A): Coverage starts based on the month you sign up:

If you sign up…………………………………………………………………….Coverage starts:
Before the month you turn 65 …………………………………….The month you turn 65
The month you turn 65, or during the 3 months after ……The next month
Signing up for premium-free Part A later

You can sign up for Part A any time after you turn 65. Your Part A coverage starts 6 months back from when you sign up or when you apply for benefits from Social Security (or the Railroad Retirement Board). Coverage can’t start earlier than the month you turned 65.

[ResearchMed]

Yes. He is at full retirement age and eligible for Medicare. My husband has amazing health insurance from his company and we want to keep it. Also, his health insurance covers me, too.
Thank you for your assistance.

Welcome to Bogleheads!

If your husband has creditable health care through his employer, there is no need for him to drop that and start Medicare if he prefers not to change. (And if you are covered by his Employer health insurance, that can continue also.)

He can continue with the Employer health insurance as long as he is eligible and wishes to do so.
Just make sure that it is CREDITABLE coverage. His employer (the benefits group, probably) can tell him if this is the case.

Just because one is a certain age does not mean they *must* start Medicare or Social Security.
Postponing SS until age 70 can add to the amount paid for the rest of one's life (and ditto for a surviving spouse).
Note that if one does not have creditable coverage, then delaying Medicare can lead to large penalties -->> for the rest of one's life, so this is worth double checking.

RM

[LadyGeek]

cindylov3spaul - In order to provide appropriate advice, it's best to keep all the information in one spot. I merged your update back into the original thread. If you have any questions, ask them here.

(Thanks to the member who reported the post and provided a link to this thread.)

[InMyDreams]

Welcome to Bogleheads!

If your husband has creditable health care through his employer, there is no need for him to drop that and start Medicare if he prefers not to change. (And if you are covered by his Employer health insurance, that can continue also.)

But again, does his employer cover more than 20 employees?
https://www.medicarefaq.com/faqs/medica ... -coverage/

Just because one is a certain age does not mean they *must* start Medicare or Social Security.
Postponing SS until age 70 can add to the amount paid for the rest of one's life (and ditto for a surviving spouse).
Note that if one does not have creditable coverage, then delaying Medicare can lead to large penalties -->> for the rest of one's life, so this is worth double checking.

Also -
If you are under full retirement age for the entire year, we deduct $1 from your benefit payments for every $2 you earn above the annual limit.
Starting with the month you reach full retirement age, you can get your benefits with no limit on your earnings.
https://faq.ssa.gov/en-us/Topic/article/KA-01921#!#
When to start SS payments is often debated on BH, and the answer is tailored to individual situations.

If you start Medicare mid-year, you must prorate HSA contributions. Hmm. There's another interesting thing to ask about, that I don't know the answer to -
If he stays with his employer's HDHP and starts Medicare, would you (the OP and spouse) still be eligible to make HSA contributions for yourself (or family???)
Others will need to take a stab at that one.

[Gubshu]

H began Medicare mid-year. I remained on “his” HDHP insurance (retiree policy through his former employer) after he transitioned to Medicare in October. He was able to contribute the annual family maximum HSA contribution + catch up amount, divided by 12, multiplied by the number of months he was covered under the HDHP insurance. It had to be in the HSA before he started in the Medicare plan. We had always contributed to his HSA, so I opened my own once he was on Medicare & contributed based on my own coverage. This year, I am able to contribute only the single HSA maximum + catch up amount.

This is a good overview: https://www.journalofaccountancy.com/is ... ge-65.html.