As we are headed into tax season, I wanted to remind people to try to put away money into their HSAs for the past year 2022, and take advantage of the key tax savings. If you are new to having an HSA for 2023 now is a great time to start planning for your future. According to Fidelity, the average American will pay $300,000 to $350,000 once they turn 65 in future Medicare premiums and expenses. It’s also important to know that once you turn 65 once you’re enrolled in Medicare, you can’t contribute to a Health Savings Account. Right now is the perfect time for consumers to learn how to utilize an HSA to their advantage to help pay for future Medicare expenses which eventually can be very costly. You can use an HSA to pay for future B premiums and you still have access to HSA funds you have accumulated over the years to also pay for the future long-term, or a costly implant and or a crown that needs to be replaced as an example. You can also use your HSA to pay for Medicare Advantage premiums, and related plan costs, copays, coinsurance, and deductibles.
Key Question: Can I pay Medicare Part B premiums from HSA? The answer is yes. A lot of people do not pay their part B premiums and usually, most people reimburse themselves for the expense. Most likely, your part B premium will be taken out of your social security check. Then, you’ll reimburse yourself for the Medicare Part B premium free.
In addition, if your spouse is on Medicare your might be able to use your HSA to pay for their Medicare premiums. However, you must be 65 or older. Fidelity continues to be a great resource to set up an HSA and Optum Financial is a market leader in HSAs as well. As long as you the HSA account owner are age 65 and older, you can reimburse your spouse’s Medicare premiums income tax-free.
Please note that unfortunately, you cannot pay for Medicare supplement premiums using HSA funds. However, higher-income families that pay higher Part B premiums and IRMAA (income-related monthly adjustment amount) can use their HSA funds to pay for the additional costs of higher part B premiums and IRMAA. The higher beneficiary’s MAGI (Modified Adjusted Gross Income) the higher the IRMAA.
HSA Contributions-For 2022 individuals can put away $3,650 and families can save $7300. In 2023, individuals are at $3850 and $7,750 for families with the $1,000 catch-up contribution over the age of 55 which is another great way to take advantage of these contributions. Happy February!Filed Under: Insurance Tips