HSA and Medicare: the 6-month rule, when to stop contributing, and what HSAs can pay for

Can you contribute to an HSA once you’re on Medicare?

No. Once you are enrolled in any part of Medicare, including Part A alone, you can no longer put money into a Health Savings Account, and neither can your employer. The account itself stays yours, and you can keep spending from it.

Turning 65 does not end contributions by itself. What ends them is Medicare enrollment. If you are still working, still on an HSA-eligible plan and not enrolled in Medicare, you can keep contributing past 65. Our guide to working past 65 and Medicare covers when delaying Medicare is allowed.

What is the HSA 6-month rule?

When you sign up for Medicare after 65, Part A starts up to 6 months before the month you apply, but never before the month you turned 65. The IRS treats you as covered by Medicare for those backdated months, so any HSA contributions made during them become excess contributions.

Here is how it plays out. Say you turned 65 in 2025, keep working, and apply for Medicare in September 2027. Part A reaches back to March 2027. Your last month of HSA eligibility is February 2027, so contributions made from March onward, including your employer’s deposits, have to come back out.

This is why people often say to stop contributions 6 months before you apply. If you enroll in Medicare right when you first turn 65, there is no backdating to worry about, because Part A cannot start before the month you turned 65.

When exactly should you stop contributing?

It depends on how and when your Medicare starts. The table shows the common situations.

Remember to stop payroll contributions and ask your employer to stop its deposits too. Employer money counts toward the same limit.

How much can you contribute in your last year?

You can contribute one-twelfth of the annual limit for each month you were eligible. For 2026 the limit is $4,400 for self-only coverage and $8,750 for family coverage. For 2027 it rises to $4,500 and $9,000. If you are 55 or older, add $1,000.

So if your last eligible month in 2027 is June and you have self-only coverage, your 2027 limit is 6/12 of $5,500 (including the catch-up), or $2,750. There is also a “last-month rule” that can allow a full year’s contribution, but it requires you to stay eligible for a 12-month testing period afterward. Enrolling in Medicare breaks that test, so for people heading to Medicare the monthly proration is usually the safer path.

What if you already contributed too much?

Ask your HSA custodian for a removal of excess contributions, plus any earnings on that money, before your tax filing deadline, including extensions. Done in time, you avoid the 6 percent excise tax that applies each year excess money stays in the account.

The removed contributions are reported on your tax return, and the earnings are taxable. Tell your custodian it is an excess removal, not a regular withdrawal, so it is coded correctly. Your tax professional can confirm the forms for your situation.

Can you turn down Part A to keep your HSA?

Not if you are collecting Social Security retirement benefits. Part A comes with those benefits. To drop Part A, you would have to withdraw your Social Security application and pay back the benefits you received, which rarely makes sense.

If you have not claimed Social Security yet and are still working with employer coverage, you can simply wait to apply for either one. When you do apply, the 6-month backdating applies to both. Read more on how Medicare works with Social Security.

What can your HSA pay for after 65?

After 65, your HSA can pay premiums for Part B, Part D and Medicare Advantage, including any income-related amount (IRMAA), plus deductibles, copays, dental, vision and hearing costs, all tax-free. Medigap premiums are the notable exception: they are not a qualified expense.

You can also reimburse yourself for Part B premiums that were withheld from your Social Security check. After 65, you can take money out for anything, without the 20 percent penalty that applies before 65, but non-medical withdrawals are taxed as income. Pick an expense below to check the rule.

Many people save their HSA specifically for retirement premiums. The planner below shows roughly how long a balance could cover them.

What about your spouse’s HSA?

Your spouse’s eligibility is separate from yours. A younger spouse who is not on Medicare and has their own HSA-eligible coverage can keep contributing, including family coverage if the plan covers other family members. If you are both 55 or older, each of you needs your own HSA to make the $1,000 catch-up contribution.

Once you, the account owner, are 65 or older, your HSA can also pay your spouse’s Medicare premiums tax-free. If you are under 65, it cannot, even if your spouse is on Medicare.

What should employers do when an employee enrolls in Medicare?

Stop the employer’s HSA deposits for that employee as of the first month of Medicare coverage, and remember that Part A can be backdated. Ask employees who are 64 or older to tell HR before they apply for Medicare or Social Security, so payroll can stop contributions in time.

If you are weighing an HSA against a reimbursement arrangement for your team, see our HSA vs HRA guide for small businesses.