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