Medicare preparation: When to stop paying into an HSA

If a person has a high deductible health plan, they may also have a health savings account (HSA). They should stop paying into an HSA 6 months before they enroll or are automatically enrolled in Medicare.

HSAs allow individuals to save on their medical costs, specifically if they have a high deductible health plan. They can set aside pretax dollars to pay into their HSA and use the funds toward healthcare costs.

A person can have their pretax dollars paid directly from their paychecks into their HSA. Alternatively, they can add their own money, which becomes tax-deductible.

If an individual is approaching Medicare age, for which they would become eligible when they turn age 65, they should stop making HSA contributions to avoid penalties.

A person should stop paying into their HSA up to 6 months before they enroll in Original Medicare Part A or are automatically enrolled in it, or up to the first day of the month in which they turn age 65, whichever is shorter.

This is because Medicare Part A can provide up to 6 months of retroactive healthcare coverage that starts when a person applies for Social Security benefits.

If an individual adds excess funds to their HSA, they may be subject to a 6% excise tax on the excess contributions.

However, even though a person cannot make contributions after a specific time, they can still use the money they have in their HSA toward health expenses, including:

If a person continues to work after age 65 and contributes to an HSA, they must delay enrollment in Original Medicare Part A and Part B.

To avoid the penalty fee, they must stop contributing to their HSA 6 months before they plan to enroll in Original Medicare.

If a person is married — and they and their spouse have individual HSAs — they can both continue to make contributions to their own accounts until they know their plans regarding enrolling in Medicare.

However, if they have an HSA with a family contribution limit, the person who becomes eligible for Medicare can no longer make contributions, and an eligible spouse will need to change to self-only HSA contribution coverage.

To have an HSA, a person must be eligible for a high deductible health plan (HDHP). They cannot have another type of health plan alongside it, including Medicare.

In 2025, if a person has a single or self-only high HDHP, they can contribute a maximum of $4,300 to an HSA. If they have family HDHP coverage, they can contribute a maximum of $8,550.

Individuals can use the funds from an HSA for qualified medical expenses. These include but are not limited to:

If a person has an HDHP, they may also have an HSA.

Because people cannot be enrolled in Medicare while also being eligible to pay into an HSA, they should stop paying into their HSA 6 months before enrolling or being automatically enrolled in Medicare, or the day before the first day of the month they turn age 65, whichever is shorter.

If an individual continues working past age 65 and would like to continue contributing to an HSA, they must stop making HSA contributions before enrolling in Medicare Part A or Part B. Remember, a person may automatically be enrolled in Medicare Part A if they apply for Social Security benefits.

If a person pays into an HSA after enrolling in Medicare, it is considered an excess contribution, and they may have to pay a penalty fee.