Article written by:
Donna Anderson
Tax Manager
Are you 64 years old and working, and plan to keep working? If so, do you work for a company of 20 or more employees that offers a health insurance plan creditable to Medicare? Then you have a decision to make. Do I apply for Medicare Part A or not?
If you plan to apply for Medicare Part A, then you need to stop contributing to a health savings account six months prior to applying or you could pay a penalty. Medicare Part A is generally free and is for hospital insurance. As long as you are part of a creditable plan, you are not penalized for not applying for Medicare Part A or B at 65.
If you decide to keep contributing to a health savings account, then you should not apply for Medicare Part A or you could be penalized.
The decision represents a personal comfort level. If you are in good health, you might want to keep contributing to a health savings account. If you want to hedge against the possibility of needing hospital care, you might want to stop contributing to a health savings account and apply for Medicare Part A.