HSAs, Medicare, and employees over 65 still working, can they contribute, draw, what does it all mean

I get this question from more and more these days, about #Medicare.  What happens if I have an employee that is over 65, is eligible for Medicare and wants to continue with their HSA.  Lets break this down a couple of ways.  First off, someone can continue to participate in the company’s health plan over 65…even if they have Medicare.  There area a couple of situations to think about.  Since Part A (hospital services) are free to people over 65, many will enroll, even if they are still working, and on the company’s Health Insurance plan.  Most of them will delay the enrollment into Medicare Part B (Physician Services), until they leave employment, and that’s perfectly fine.  This is the typical scenario for people working over 65…except when you have an #HSA or #HDHP (High Deductible Health Plan)

If you have an #HSA plan at work and you enroll into Medicare

When an #employee is enrolled into an HSA compatible Health Insurance plan at work, the #employER can contribute to the HSA savings account, the employEE can contribute, or both.  If the employee is enrolled into ANY part of Medicare, either Part A, Part B, or both, they are not allowed to contribute to the HSA savings account anymore.  The employee is free to use the already banked funds for the allowed services, but they have to stop contributing when they enroll into any parts of #Medicare.  I know its confusing….welcome to the dysfunctional world of #HealthInsurance.

Who pays claims when an employee is enrolled in Medicare and the #GroupHealth plan at work

If the company has 20 or more employees and the employee is enrolled into both Medicare and the employer plan, the company plan is the Primary Payer of claims.  Conversely, if the company has under 20 employees, Medicare is the Primary Payer.

Every situation is different, so having a strategy BEFORE you end up in this situation is the key.  #EmployeeBenefits is an absolute specialty product, and deserves to be recognized as such.  Find an Independent Brokerage that can give you guidance, its well worth it!

Steve Brauer is the Principal at Brauer Insurance Services in San Jose, an Employee Benefits specialist.  He and his daughter are Independent Brokers serving employers all over the state of CA.  www.brauerinsurance.com   (877) 421-4325

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