What Is an HSA?

A Health Savings Account (HSA) is a tax-advantaged savings account designed to help individuals pay for qualified medical expenses. With triple tax benefits, tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified expenses, HSAs can be a smart way to manage healthcare costs. They’re especially beneficial for healthy individuals or those planning ahead for future medical expenses. However, HSAs are only available to those enrolled in a High-Deductible Health Plan (HDHP), which may not be ideal for people with frequent healthcare needs.

HSAs and Medicare: What You Need to Know

Once you enroll in Medicare, you are no longer eligible to contribute to an HSA. That’s because Medicare does not meet the requirements of a high-deductible health plan.

✅ Good News: You can still use existing HSA funds to pay for qualified medical expenses, including:

• Medicare Part B, Part D, and Medicare Advantage premiums

• Deductibles, copayments, and coinsurance

• Certain long-term care services

💡 Quick Tip: If you’re nearing age 65 or Medicare eligibility, plan ahead. You must stop HSA contributions the month you enroll in Medicare. Contributing after enrollment can lead to tax penalties.

HSAs and Marketplace Plans: A Smart Pairing (If Eligible)

If you’re looking for individual health insurance through the Marketplace, you may be able to choose a HDHP that qualifies for HSA use.

To maintain HSA eligibility with a Marketplace plan:

• The plan must meet the IRS minimum deductible and maximum out-of-pocket limits for HDHPs.

• You cannot have other disqualifying coverage, such as a low-deductible plan or certain types of supplemental insurance.

✔️ Benefits of pairing an HSA with a Marketplace plan:

• Use pre-tax dollars to pay for deductibles, copays, and other out-of-pocket expenses

• Reduce your taxable income through HSA contributions

• Save for future healthcare expenses, including in retirement

💡 Quick Tip: Always confirm that your Marketplace plan is HSA-compatible before enrolling.

We’re Here to Help

Choosing the right insurance plan and knowing how it works with an HSA can feel overwhelming. Whether you’re preparing for Medicare or selecting a Marketplace plan, our team is here to simplify the process.

We’ll help you:

• Understand how HSA rules apply to your situation

• Avoid costly mistakes like excess contributions

• Maximize the tax-saving potential of your HSA

📞 Contact us today to get expert guidance tailored to your healthcare and financial goals.