A Health Savings Account (HSA) lets you deposit untaxed dollars into a savings account that can be used to pay for qualified medical necessities. Employers and financial institutions offer this kind of savings account to eligible individuals.
You may only contribute to an HSA at age 65 or older if you are covered by an HSA qualified health plan, you are not a tax dependent, and you are not enrolled in Medicare. You will not be able to open or make contributions to your HSA after you enroll in any part of Medicare.
Your enrollment in Medicare will not disqualify your HSA eligible spouse from making contributions to their HSA account. You or your spouse can still make tax-deductible contributions into the HSA, if you remain covered on a family contract.
Even if you are no longer HSA eligible, you still have the right to make income tax-free distribution for qualified medical expenses for as long as you have a balance in your account.
You are still subject for the Medicare Part B and Medicare Part D penalty if you delay enrollment solely for the purposes of maintaining an active HSA account. In addition, you will need to postpone your Social Security retirement benefits because you will automatically be entitled to Medicare Part A. You will not be able to decline Medicare Part A if you are receiving Social Security benefits.
Your Medicare Part A enrollment is retroactive for six months if you enroll after becoming initially eligible (coverage will not start earlier than the month you turned 65). This means that you will need to stop contributing to your HSA at least 6 months before you apply for Medicare Part A to avoid a tax penalty.