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Turning 65

Medicare and an HSA: when contributions must stop

Published By Vista Insurance Services 9 min read

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Your Health Savings Account (HSA) can take contributions only until the first month you are enrolled in Medicare, Part A or Part B. If you sign up after 65, Part A can start up to six months before the month you sign up, never earlier than the month you turned 65, and the IRS counts contributions made in those backdated months as excess. That's why Medicare.gov suggests you and your employer consider stopping contributions at least six months before you apply for Medicare.

Table of contents

When does Medicare end HSA contributions?

IRS Publication 969 lets you put money in an HSA only if you are covered by a high deductible health plan (HDHP) on the first day of the month, have no other health coverage it doesn't allow, aren't enrolled in Medicare and can't be claimed as someone else's dependent. Here is its Medicare rule, word for word:

"Beginning with the first month you are enrolled in Medicare, your contribution limit is zero." (IRS Publication 969, 2025)

Turning 65 doesn't end contributions by itself. Under IRS Notice 2004-50, just being eligible for Medicare doesn't make you ineligible for an HSA; enrolling does. Someone enrolled in Part B but not Part A can't contribute either, so either part ends contributions.

Your situation HSA contributions Where the rule comes from
65 or older, covered by an HDHP, not enrolled in Part A or Part B May continue, if you meet the other tests IRS Notice 2004-50, Q&A 2
Enrolled in Part A, Part B or both Stop with the first month you are enrolled IRS Publication 969
65 or older and receiving Social Security benefits Part A starts automatically, so contributions stop SSA.gov and Notice 2004-50
Signing up for Medicare after 65 Part A can start up to 6 months back, and contributions in those months are excess Medicare.gov and Publication 969

Why can Part A start before the day I sign up?

Most people pay no Part A premium, because they or a spouse paid Medicare taxes long enough while working. If you qualify for Part A that way, you can sign up for it any time after you turn 65, and your coverage starts 6 months back from when you sign up or apply for Social Security benefits. Coverage can't start earlier than the month you turned 65. And if you're 65 or older and getting Social Security benefits, you're enrolled in Part A automatically. Social Security warns that contributing to an HSA after your Medicare coverage begins may result in additional taxes.

The zero limit reaches back into those months too. If your enrollment is backdated, Publication 969 counts contributions made during the retroactive coverage as excess contributions. That's why it pays to plan ahead: if you and your employer stop contributions to your HSA at least 6 months before you apply for Medicare, that may help you avoid a tax penalty.

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How much can I put in during the year Medicare starts?

Here are the 2026 numbers, set by IRS Revenue Procedure 2025-19:

2026 figure Self-only HDHP coverage Family HDHP coverage
Yearly HSA contribution limit (Rev. Proc. 2025-19) $4,400 $8,750
Lowest yearly deductible for an HDHP, other than bronze and catastrophic plans $1,700 $3,400

One newer rule: for months beginning after December 31, 2025, a bronze or catastrophic plan available as individual coverage through an Exchange is treated as an HDHP even if it doesn't meet the minimum deductible or out-of-pocket requirement (IRS Notice 2026-5).

If you're an eligible individual who is 55 or older at the end of the tax year, you can add $1,000 to the limit (Publication 969). Employer contributions that are excludable from your income, including through a cafeteria plan, reduce the amount you can put in.

In the year Medicare starts, you aren't eligible for the whole year, so you figure your limit month by month on the worksheet in the Form 8889 instructions. Publication 969 walks through an example: a person with self-only HDHP coverage and the extra $1,000 turned 65 in July 2025 and enrolled in Medicare. Their 2025 limit was $2,650, which is six months of a $5,300 yearly limit.

What if my contributions overlapped backdated Part A?

They're excess contributions, and Publication 969 spells out what that means:

  • Not deductible. Excess contributions aren't deductible, and excess contributions made by your employer are included in your gross income.
  • A yearly excise tax. Generally, you pay a 6% excise tax on excess contributions, figured on Form 5329, for each tax year the excess stays in the account.
  • A way to avoid the excise tax. You can withdraw the excess, and any income it earned, by the due date of your tax return for that year, including extensions. You report the earnings as other income for the year you withdraw them.

How these IRS rules apply to your own return is a question for a CPA, an enrolled agent or the IRS.

Can I wait on Medicare while I keep working?

If you're already covered through an employer group health plan, Social Security says it might make sense to sign up for Medicare later or delay Part B. With health insurance through your or your spouse's job, you can sign up any time while you're working and still covered, or within 8 months after the work or the group health plan ends, whichever happens first. That's called a Special Enrollment Period, and an HSA with an HDHP from your or your spouse's current job may make you eligible for it, so you can sign up for Part B without penalty.

Three things can change that picture:

  1. A small employer. When the company has fewer than 20 employees, your job-based coverage might not pay for health services if you don't have both Part A and Part B. Check with the employer first.
  2. Part A at 65. Because most people pay no Part A premium, you may want Part A at 65 even while you're still working. With an HSA, though, Part A also ends your contributions.
  3. COBRA or retiree coverage. COBRA isn't considered group health plan coverage. The 8-month Special Enrollment Period starts when you stop working, even if you choose COBRA, and COBRA or retiree coverage ending doesn't qualify for a Special Enrollment Period.

If you want Medicare to start when your job coverage ends, sign up for Part B the month before you or your spouse plan to retire. If you sign up for Part A at the same time, remember the HSA catch: Part A can start up to 6 months back from the date you sign up. The turning 65 page puts the steps around your birthday in order.

What can my HSA pay for once I have Medicare?

Once your Medicare coverage starts, you can still withdraw money from your HSA to help pay your share of costs, like deductibles, premiums, coinsurance or copayments.

Publication 969 lists the insurance premiums an HSA can pay. They include Medicare and other health care coverage if you were 65 or older, other than premiums for a Medicare supplemental policy, such as Medigap. So the premium for a Medicare Supplement (Medigap) policy is the one the IRS names as not qualifying. And if your Medicare premiums are deducted from your Social Security benefit, an HSA distribution to pay yourself back for that amount is a qualified medical expense, under IRS Notice 2004-50.

The premiums, deductibles, copayments and coinsurance of a Medicare Advantage plan vary by plan, and so does the monthly premium of a Part D drug plan. How the IRS rule applies to each premium on your return is a question for a CPA or enrolled agent.

Working past 65 with an HSA? I can help you line up the Medicare side of your own dates: Ask Jeannie to reach out. For the tax side of the account, talk with a CPA, an enrolled agent or the IRS.

We do not offer every plan available in your area. Currently we represent 14 organizations which offer 52 products in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.

1-800-MEDICARE (1-800-633-4227), TTY 1-877-486-2048, 24 hours a day/7 days a week

Frequently asked questions

Can I keep contributing to my HSA at 65 if I have not signed up for Medicare?

Yes, if you meet the other tests. Under IRS Notice 2004-50, if you're covered by a high deductible health plan and not enrolled in Part A or Part B, you may contribute until the month you enroll, including the extra contribution for people 55 or older. The catch: when you do sign up after 65, Part A can start up to 6 months back, and Publication 969 counts contributions made during that backdated coverage as excess.

Does starting Social Security benefits affect my HSA?

It can. If you're 65 or older and getting Social Security benefits, you're enrolled in Part A automatically, and Part A coverage begins up to 6 months before the month you apply. From the first month you're enrolled, your HSA contribution limit is zero.

Can my spouse keep contributing to an HSA after I go on Medicare?

Possibly. In an example in IRS Notice 2004-50, a couple has family HDHP coverage and one spouse is enrolled in Medicare: the spouse who is still an eligible individual may contribute, and the spouse on Medicare may not. Publication 969 says each eligible spouse opens a separate HSA. How much your spouse can put in is a question for a tax professional.

What happens to the money already in my HSA after Medicare starts?

It stays in the account. Under Publication 969, amounts left at the end of the year generally carry over. Money you take out for anything other than qualified medical expenses is subject to income tax, but the additional 20% tax does not apply to distributions made after you reach 65.

Sources

About the author

Vista Insurance Services is a Florida fictitious name registered to Vista Consultants LLC, a Florida insurance agency (agency license L135539) with Jeannie Pond as agent in charge. Jeannie Pond is a Licensed Insurance Agent, NPN 8940178, licensed since 2009.

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