People enrolled in Medicare can not contribute to a health savings account. But do not despair, if you have a balance remaining in an existing HSA. While on Medicare, you can continue to tax-free withdrawals from your account to pay out-of-pocket medical expenses, such as your share of prescription drug costs, co-payments and deductibles. Once you turn 65, you can use HSA money tax-free to pay premiums for Medicare Part B and Part D, and for Medicare Advantage plans.

The annual ceilings on deductible pay ins to HSAs are slated to go up in 2021 to $3,600 for account owners with self- only coverage and to $7,200 for those with family coverage. People born before 1967 can put in additional $1,000. The limits on out-of-pocket costs, such as deductibles and co-payments, will increase to $7,000 for individual coverage and to $14,000 for family. Minimum policy deductibles will remain $1,400 for individuals and $2,800 for families.

Health Savings Account

by | Jun 9, 2020 | Tallahassee Tax Service | 0 comments