Q: I’m about to turn 65, but am still working. I have a high-deductible health insurance policy and health savings account through work now, but I’ll be signing up for Medicare soon. Can I keep my HSA account after I’m on Medicare?
A: You can continue to use the money already in the account tax-free for uninsured medical expenses. But you can no longer make new contributions to your health savings account after you sign up for Medicare.
Many out-of-pocket expenses qualify for tax-free HSA withdrawals even after you’re on Medicare. You can use the money to pay premiums for Medicare Part B, Part D prescription-drug coverage or all-in-one private Medicare Advantage plans (but not for medigap premiums).
You can also use the money for co-payments and deductibles you pay for medical expenses, out-of-pocket costs for prescription drugs, vision and dental care, and even a portion of qualified long-term-care premiums ($3,500 in 2012 for people ages 61 to 70, for example, and more if you’re older).
For a full list of eligible expenses, see IRS Publication 502 Medical and Dental Expenses.
