When to sign up for Part A Medicare

1 in 5 baby boomers over 65 are still working.  Health insurance rates are going up and more employers are saving money by moving to a high deductible plan with a Health Savings Account (HSA).

HSAs allow individuals to contribute pre-tax into an account that rolls over each year (you save what you don’t spend instead of the typical use it or lose it Flexible Savings Account).

Individuals can use money in their HSA after retirement to pay for certain qualified medical expenses.  The pre-tax contribution makes HSAs an attractive choice for individuals looking to pay for their medical expenses with pre-tax dollars.

However, once you sign up for your Medicare Part A, you ability to contribute to an HSA stops.  For individuals working past 65 with a HSA plan from work, do not sign up for Part A when you turn 65. Doing so will prevent you from contributing further to your HSA.  

Once you sign up for Part A, there no way to disenroll.

When you do decide to retire and go on Medicare without an employer plan, you must stop contributing to your HSA 6 months before your Part A starts.  There’s a look back period so if you do contribute within 6 months of signing up for Medicare, you may be hit with tax penalties.