Medicare and HSAs: A Common Pitfall

If you’re contributing to a Health Savings Account (HSA), be careful when enrolling in Medicare. Once you sign up for Medicare (even Part A), you can no longer contribute to an HSA.

Key Rule: Because Medicare Part A can be retroactive up to 6 months from application date, stop HSA contributions six months before enrolling in Medicare to avoid tax penalties. You can, however, keep using the HSA funds for qualified medical expenses — including Medicare premiums.