HSAs and Medicare:
The benefits of an HSA don’t stop when you retire. While you are no longer allowed to contribute to your HSA after enrolling in Medicare, you can still use your HSA funds income free to pay for qualified medical expenses. You can also use your HSA to pay for Medicare premiums and qualified out-of-pocket expenses including deductibles, copays and coinsurance for:
- Part A (hospital and independent care)
- Part B (doctor and outpatient care)
- Part D (prescription drugs)
Keep in mind that Medicare does not cover hearing aids or vision, dental or nursing home care.
HSA and Medicare Eligibility:
Two different federal agencies have primary responsibility for these programs—the Department of Health and Human Services, for Medicare, and the Department of Treasury, for HSAs. Each agency issues rules related to its product, leaving Americans confused. See the HSA and Medicare FAQ
Withdrawing funds during retirement:
You can use the money in your HSA to pay for qualified medical expenses at any time. Once you turn 65, however, you can withdraw the money from your HSA for nonqualified expenses without a penalty. You will just be required to pay ordinary income tax on that amount.
