IRMAA Basics
Why You Can't Contribute to an HSA When Enrolled in Medicare
Verified against SSA POMS as of September 10, 2026
The short answer
Health Savings Accounts (HSAs) cannot accept contributions from individuals enrolled in Medicare. Once an individual becomes entitled to Medicare, contributions must stop. Enrolment in any Part of Medicare triggers this restriction.
Understanding HSA Contribution Restrictions
Health Savings Accounts (HSAs) are designed to save for medical expenses while benefiting from tax advantages. You can only contribute to an HSA when you are covered by a High Deductible Health Plan (HDHP) and not enrolled in other health coverage like Medicare. Specifically, contributions to HSAs are prohibited once you enroll in Medicare. This rule ensures that HSAs are used as intended — for those who are using high deductible health plans to cover their medical expenses.
SI 01120.235 View source ›Implications of Medicare Entitlement on HSA
Once an individual enrolls in Medicare, they must stop contributing to their HSA. However, the funds already in the account can still be used for qualified medical expenses, tax-free. If HSA funds are used for non-qualified expenses, they will incur a 20% additional income tax, unless distributions occur after age 65, disability, or death, in which case only regular income tax applies. It is important to note that if one member of a family enrolls in Medicare, contributions can still be made to the HSA for the non-Medicare spouse. Additionally, the family contribution limit can be utilized as long as there is also a child on the HSA plan, but these contributions cannot be deposited into the Medicare beneficiary’s account.
SI 01120.235 View source ›Why Does Enrolling in Medicare Affect HSA Contributions?
The Medicare Modernization Act mandates that HSA contributions are only allowed for individuals who are covered solely by an HDHP. Medicare coverage does not meet this requirement. Therefore, to maintain compliance with federal tax regulations, contributions must cease upon Medicare enrollment.
SL 50001.510 View source ›Frequently asked
Why can't I contribute to my HSA after enrolling in Medicare?
Once you enroll in any part of Medicare, you are not eligible to contribute to an HSA because Medicare does not qualify as a High Deductible Health Plan.
Can I use my HSA funds if I have Medicare?
Yes, you can use existing HSA funds for qualified medical expenses even if you are enrolled in Medicare. HSA funds can be used to pay for Part B and D premiums, copays, and deductibles, as well as Medicare Advantage premiums and related charges. However, HSA funds cannot be used to pay for Medigap premiums, but they can cover deductibles or copays associated with Medigap plans.
What happens to my HSA if I enroll in Medicare?
You must stop contributing to your HSA if you enroll in Medicare after age 65, as contributions must cease 6 months prior to enrollment. However, if you enroll during your initial enrollment period, you do not need to stop contributions 6 months in advance. To continue contributing to your HSA, you must defer enrollment in both Medicare Part A and Part B. Regardless of your enrollment timing, you can still use your existing HSA funds for eligible expenses.
Are there penalties for contributing to an HSA while on Medicare?
Yes, contributions made while enrolled in Medicare are considered excess contributions and must be withdrawn. These contributions, along with any interest or investment gains, are subject to a 6% tax penalty.
Do I need to close my individual HSA account if I enroll in Medicare?
No, you do not need to close your HSA. You just need to stop making contributions.
Do HSA withdrawals for eligible medical expenses count toward modified adjusted gross income for IRMAA purposes?
No. HSA withdrawals used for eligible medical expenses do not count toward MAGI for IRMAA purposes. However, if HSA withdrawals are spent on ineligible items, then those withdrawals will count toward MAGI which could affect IRMAA surcharges and could have other financial consequences.