Married & Medicare Eligible? Check the Spousal HSA Eligibility Rules

by Prof. Robert Bloink and Prof. William H. Byrnes

Many taxpayers are currently enrolling in Medicare during this year’s open enrollment season. Taxpayers often look forward to their ability to enroll in Medicare in order to reduce health coverage costs. Still, today it’s also common for clients to elect to keep working and wonder how their enrollment in Medicare will impact their right to continue funding a valuable health savings account (HSA). Medicare doesn’t offer a qualifying health plan option to allow HSA eligibility. That said, situations aren’t always so simple. For clients in complicated situations, the answer is often similarly complex—and all too often, clients receive conflicting advice, especially when both spouses have yet to enroll in Medicare. Understanding the rules is critical, both when it comes to avoiding penalties and maximizing the overall value of the client’s HSAs moving forward into retirement.

Medicare and HSAs: The General Rules