Janell Sluga Medicare & Individual Health Insurance Account Executive View Bio

Lawley Medicare Solutions Learning Center:

Ask Janell!

 

QUESTION: I am currently on my employer’s High Deductible Health Plan, which includes an HSA, and my husband is turning 65. How does his Medicare benefit impact the coverage my employer provides us?

 

ANSWER: Turning 65 and becoming eligible for Medicare insurance is an important threshold for your husband, and your health insurance coverage could be impacted.

The first issue I want to address is your HSA (Health Savings Account) contribution. These contributions are pretax dollars which can be used to pay medical expenses and premiums at a later date. When you have a High Deductible Health Plan (HDHP) you often have the option of contributing to an HSA. In some situations, your employer contributes to this HSA on your behalf as well. This HSA has contribution limits each year, and in 2024 you can contribute up to $4,150 for most individuals, $8,300 for a family. If you are over 55 years of age, you can add an additional $1,000 to your HSA. This HSA money accumulates over time, and continues to be your money EVEN AFTER the insurance coverage ends.

When evaluating your coverage, it is important to look at what you are contributing to the HSA. The first thing I could ask you to evaluate is the amount you and your employer are contributing to the HSA. If you are currently contributing the maximum for a family + the additional amount due to your age, that could be as much as $10,300, if you are both over 55. Note that once you become Medicare eligible, YOU CAN NO LONGER CONTRIBUTE INTO AN HSA. So once your husband turns 65 and thus becomes eligible for Medicare insurance, you and your employer can no longer contribute to the HSA on his behalf. Then you will be the only one contributing to the HSA, and your new maximum contribution will be $5,150, if you’re over 55.

Your HSA contribution amount may need to be adjusted to reflect the rule against contributions. This is because the rule relates to the IRS tax code and could have income tax ramifications if your contribution amount is not adjusted. If you evaluate your HSA contribution and find you and your employer are putting into the HSA is less than $5,150 (if you are over 55), there is nothing you need to do regarding your HSA, you may continue to contribute to it and keep it as your health insurance. If you are contributing more than that, you must reduce your amount to less than that.

The second issue worth reviewing is the cost of the HDHP with regard to the premium you pay for you and your husband’s coverage. Medicare Part A (Hospital Coverage) has no premium for most enrollees. For those individuals with less than 10-year work history there is a monthly premium. Medicare Part B has a monthly premium of $174.70 for most individuals. Individuals with an annual income over $103,000 and married couples with income over $206,000 pay a higher Medicare Part B premium. Medicare Part A has a deductible of $1,632 for each hospital stay of up to 60 days. Medicare Part B has a deductible of $240 per year and then Medicare Part B pays 80% with 20% of covered services left for the individual to pay. Then your husband also needs to add on a Prescription Drug Plan of some type.

There are over 70 different plan options available (to those in Western New York with Medicare insurance), which means there are many options available to your husband if he were to leave your employer provided HDHP. He should investigate his Medicare insurance options and review those cost structures to compare them to your HDHP coverage. He may find coverage that would be appropriate for his situation. His health, his medications, his providers, and his pharmacy are all parts of that evaluation process.

If he decides to enroll into Federal Medicare program, aka Parts A & B, he would contact the Social Security Administration (SSA) to sign up. When he’s approved and his Medicare ID card arrives, he could stay on your plan and keep the Federal Medicare plan, or he could drop off your plan and choose his own Medicare insurance coverage. Your employer provided HDHP might reduce your premium if he leaves and it starts to cover just you. His Medicare insurance coverage would provide his health insurance. Moving forward, every single year he can adjust that coverage as necessary for his health needs during the Annual Open Enrollment period of October 15 to December 7.

You are smart to consider the options that Medicare insurance offers your husband and impacts your employer provided HDHP.

 

Read all Inside Medicare articles HERE.

 

LAWLEY HAS A TEAM DEDICATED TO MEDICARE INSURANCE!

Our licensed Medicare & Individual Health Insurance team can help clients understand the details of Medicare insurance plans, assist with choosing the right benefits and coverage, and provide guidance when life events that affect health coverage occur.

For questions, concerns, or to reach Lawley Medicare Solutions, fill out the contact form below or call 716.849.1540.