UNITED STATES─ Reader Alert: Toni turned 65 on Wednesday, May 20 and has now joined the maze of Medicare. She will discuss what Medicare issues she meets in the future.

Hi Toni, I attended one of your seminars and now I need help with my Medicare issue. I am 65 almost 66, “still working” and covered by my employer’s group health HSA plan. Approximately $5,000 is contributed to my qualified tax-deductible HSA account for medical expenses.

When I talked with my company’s HR department, they advised me to apply for Medicare Part A (hospital) although I really did not need it. Now I find out that since my insurance is an HSA, signing up for Part A has disqualified me for any contribution to the HSA plan. I have a few questions:

1)       Does having Part A really disqualify me from contributing to my HSA Plan?

2)       If so, how can I stop Medicare Part A and stop this HSA tax situation?

Thanks, Stephen, Lake Charles, LA.

Stephen: This is an especially important topic to those who are turning 65, still working with an HSA because as you are experiencing Stephen, HR departments and friends are giving wrong advice to those becoming Medicare age. This week, three different Toni Says Medicare column readers, sent in HSA questions because they had received wrong information which is costing them from funding their HSA.

The rule about Medicare Part A and making contribution to an HSA is discussed in the Medicare & You handbook.  It states, “You can’t contribute to your HSA once your Medicare coverage begins” …the handbook also states in the last paragraph, “To avoid a tax penalty, you should stop contributing to your HSA at least 6 months before you apply for Medicare.” Please review this information…Very important…

Below are the answers to your questions:

  1. That’s correct!! Enrolling in Medicare Part A will disqualify you from contributing funds to your HSA. Contact the Toni Says office by email at info@tonisays.com or call 832-519-8664 and together we can explore your Medicare options.
  2. Question #2 about stopping your Medicare Part A. I would call Social Security at 1-800-772-1213 or visit your local office explain to the agent how you were misinformed since you have been enrolled and funded your HSA before you turned 65 and now you cannot contribute to the plan. Ask how you can appeal what was advised to you. Since Social Security offices are not open due to COVID-19, you will have to fax in your information, and you want to schedule an appointment with a Social Security agent by phone until the Social Security offices reopen.
  3. Getting Part A back: When you talk with Social Security ask what type of problems you will have to getting back into Part A later. It is rare that one stops Medicare Part A, but more Boomer’s enroll in HSAs to grow their retirement because of Health Savings Accounts. I have consulted with many who have stopped Medicare Part B (Medical) when they have returned to work with group health insurance.

For those who need to delay Medicare Part A due to “still working fulltime” with company health insurance and want to continue making contributions to their HSA can do so by simply NOT enrolling in Medicare Part A when turning 65. When you and your spouse retire later past 65, when no longer working full-time with company health insurance, then you can apply for Medicare. Contact the Toni Says office at 832-519-8664 for more information on Medicare and HSA topic.

Toni King, author of the Medicare Survival Guide® is giving a $5 discount on the  Medicare Survival Guide® Advanced book and bundle package for the Toni Says® readers and friends at www.tonisays.com.