Medicare and Health Savings Accounts

I’ve had questions recently from clients who have Medicare and health savings accounts (HSA). They were wondering how they can use their HSA once they are on Medicare.

Some highlights from a Money Magazine article I just read are:

*There are no rules requiring you to spend your existing HSA balance or take any IRA-like required minimum distributions.

*You won’t pay income tax on any HSA distributions that are used for qualified medical expenses.

*You can withdraw HSA money for non-medical expenses — but you will owe income tax on the withdrawals.

*Long Term Care insurance premiums can be paid using an HSA.

*Medicare Part B premium, Medicare Advantage, and employer-sponsored retiree health insurance premiums can be paid using an HSA.

 

*Medicare supplemental insurance (aka Medigap) is not a qualified expense for an HSA.

 

The full article can be found here:  http://time.com/money/4169422/hsa-account-medicare/

I found a long list of qualified and non-qualified expenses for an HSA here:  http://www.cigna.com/qualified-health-care-expenses#el

 

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