The basic rule
Under IRS rules, you can't contribute to a Health Savings Account once you are enrolled in any part of Medicare, including Part A with no premium. That's true even if you keep working and keep HSA-eligible coverage from your employer.
Your HSA balance is yours to keep. You can keep using it tax-free for qualified medical expenses (including Medicare premiums and out-of-pocket costs) for the rest of your life. But you can no longer add new money to it once your Medicare coverage starts.
The retroactive Part A trap
Here's the trap that often catches Washington workers: when you sign up for Part A after 65, your Part A coverage can be retroactive up to 6 months before the month you apply, but never earlier than the month you turned 65.
For example, if you turn 65 in March 2026 but keep contributing to your HSA until you sign up for Part A in October 2026, Part A can be backdated to April 2026. HSA contributions for April through October 2026 can then become "excess contributions," which bring:
- Income tax on the excess amount, and
- A 6% excise tax for each year the excess stays in the account
To avoid this, stop HSA contributions at least 6 months before the month you plan to sign up for Medicare. Medicare.gov says you and your employer should stop contributing 6 months before you retire. If you made excess contributions, IRS Publication 969 explains how to withdraw them.
The Social Security catch
If you start Social Security retirement benefits at or after 65, you are automatically enrolled in Part A, and you can't turn down Part A while you get Social Security benefits. So starting Social Security ends your ability to contribute to an HSA.
Many workers approaching 65 want to keep contributing to an HSA and also want to start Social Security. You can't do both at the same time. The choices:
- Wait to start Social Security. Then you can keep contributing to an HSA as long as you otherwise qualify.
- Stop HSA contributions and start Social Security. Stop contributions 6 months before, because of the retroactive Part A rule.
- If you already get Social Security, you can't turn down Part A.
Withdrawing a Social Security application (use carefully)
If you started Social Security and Part A but then decide you want to keep contributing to an HSA, there's a narrow option: Social Security lets you withdraw your retirement application within 12 months of first becoming entitled to benefits. You use Form SSA-521, can say whether to withdraw your Medicare enrollment too, and must repay the benefits you received (including Medicare premiums withheld from them). You can do this only once in your lifetime.
This is rarely the right move and involves taxes and paperwork. Talk with Social Security and a tax professional before considering it.
If you don't sign up for Part A at 65
You can wait to sign up for Part A past 65 if:
- You haven't started Social Security or Railroad Retirement benefits (Part A comes with them automatically)
- No other coverage you have requires you to enroll (PEBB retiree coverage, for example, requires Parts A and B)
Most people get Part A with no premium at 65 after 40 quarters of Medicare-taxed work. For most people, the reason to wait on Part A is HSA contributions.
If you wait and sign up later, the 6-month retroactive rule applies, so plan your HSA stop date 6 months before you sign up.
Practical timeline for HSA contributors approaching 65
Say you turn 65 in June 2026, keep working with group coverage, and want Medicare to start in January 2027:
- Well before 65: confirm your employer has 20 or more employees, so you can delay Part B, and that you'll keep HSA-eligible coverage past 65. See Working past 65.
- About 8 to 9 months before your Medicare start date: begin planning. For a January 2027 start, aim to make your last HSA contribution for June 2026.
- 6 months before Medicare starts: stop HSA contributions. Tell HR and your HSA administrator, because employer contributions count too.
- When you sign up: since you're past your Initial Enrollment Period, use the Special Enrollment Period for people with coverage from current work, with Form CMS-L564 from your employer.
- After you enroll: keep using your HSA balance tax-free for qualified medical expenses, including Medicare premiums.
Also check how the IRS limits contributions in the year you lose eligibility; see HSA after Medicare starts.
Spending HSA money on Medicare
Once you're on Medicare, IRS Publication 969 lets you use HSA money tax-free for qualified expenses such as:
- Medicare Part B premiums (including any IRMAA amount), and Part A premiums if you pay them
- Medicare Part D premiums
- Medicare Advantage plan premiums
- Medicare deductibles, copayments and coinsurance
- Qualified long-term care insurance premiums, up to IRS age-based limits
- Most other qualified medical expenses, such as dental, vision, prescriptions and hearing aids
You can't use HSA funds tax-free for Medigap (Medicare Supplement) premiums. That's an IRS rule and a common source of confusion. The premium rules above apply when the account holder is 65 or older.
Common Washington scenarios
Tech worker turning 65 with an HSA
You work for a large Puget Sound employer and want to keep contributing to your HSA. Don't start Social Security yet, and don't sign up for Part A. Keep working with the employer's group coverage. When you plan to retire, stop HSA contributions 6 months before you sign up for Medicare.
Self-employed Washington consultant with an HSA
You're 65 and have a high-deductible plan through Washington Healthplanfinder with an HSA. A Marketplace plan doesn't let you delay Part B without a penalty, so sign up for Medicare during your Initial Enrollment Period and stop HSA contributions in time. Then choose between Original Medicare (with or without Medigap) and a Medicare Advantage plan; see Original Medicare vs. Medicare Advantage.
Worked past 65, now retiring at 67
You delayed Medicare with employer group coverage and contributed to your HSA. Now you're retiring. Stop HSA contributions 6 months before you sign up for Medicare, and use Form CMS-L564 to sign up for Part B during your Special Enrollment Period without a penalty.
A note on Washington taxes
The Washington Department of Revenue says Washington does not currently have an individual income tax, so the HSA tax rules on this page are federal. The state has passed a new income tax on very high incomes that the department says takes effect January 1, 2028; check dor.wa.gov for how it will work.
Talk to a tax professional
The HSA and Medicare rules involve taxes as well as enrollment. Before making changes:
- Talk with a CPA, enrolled agent or other tax professional about your situation
- Read IRS Publication 969 (Health Savings Accounts and Other Tax-Favored Health Plans)
- For Medicare enrollment questions, call 1-800-MEDICARE (1-800-633-4227) or Social Security (1-800-772-1213)
- For Medicare plan choices, a licensed insurance agent with Benefits Life can help at (206) SENIORS (206-736-4677), TTY 711, at no cost to you (agents don't give tax advice). You can also see plans in your ZIP code.
Sources
- IRS — Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans
- Medicare.gov — Working past 65 (HSA contributions)
- Medicare.gov — When does Medicare coverage start?
- Social Security — Sign up for Medicare
- Social Security — Can I withdraw my Social Security retirement claim?
- Washington Department of Revenue — Income tax
- Washington Health Care Authority — PEBB retiree eligibility
Frequently asked questions
Can I contribute to an HSA after I enroll in Medicare?
No. Under IRS rules, you can't contribute to a Health Savings Account once you are enrolled in any part of Medicare, including Part A with no premium. The money already in your HSA stays yours, and you can keep spending it tax-free on qualified medical expenses.
What is the 6-month retroactive Part A trap?
When you sign up for Part A after 65, Part A coverage can start up to 6 months before the month you apply, but not before the month you turned 65. HSA contributions made for those months can become excess contributions, which are taxed and can owe a 6% excise tax each year until removed. Medicare.gov says to stop HSA contributions 6 months before you retire.
Can I use my HSA for Medicare premiums?
Yes, if you are 65 or older: Part A (if you pay it), Part B, Part D and Medicare Advantage premiums are qualified expenses, as are deductibles, copays and coinsurance. Medigap (Medicare Supplement) premiums are not qualified expenses, according to IRS Publication 969.
If I start Social Security at 65, can I keep contributing to my HSA?
No. If you get Social Security retirement benefits when you turn 65 or later, you're enrolled in Part A automatically, and you can't turn down Part A while you get Social Security benefits. To keep contributing to an HSA, wait to start Social Security.
Does a Marketplace plan let me delay Medicare?
No. A Washington Healthplanfinder plan isn't group coverage from current employment, so it doesn't let you delay Part B without a penalty. Self-employed people with a high-deductible plan and an HSA generally need to sign up for Medicare during their Initial Enrollment Period at 65.
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