If I take only premium-free Part A, can I keep contributing to my HSA?

No. Enrollment in any part of Medicare, including premium-free Part A, makes your HSA limit zero from that month on. If you're still covered through current work at a large employer and want to keep contributing, delay both Part A and Social Security.

When should I stop HSA contributions before Medicare?

If you apply for Medicare or Social Security after 65, stop 6 months before you apply, including employer contributions. Part A reaches back up to 6 months, though never before the month you turned 65.

How much can I contribute to an HSA in the year Medicare starts?

The limit is prorated by month: only months when you have an HDHP and no Medicare on the 1st count. The 2026 limits of $4,400 self-only and $8,750 family, plus $1,000 at 55 or older, are multiplied by eligible months and divided by 12. The last-month rule doesn't apply.

What do I do if I over-contributed to my HSA?

Ask your custodian for a return of excess contribution and withdraw the excess plus earnings by the due date of that year's return, including extensions. The excess is treated as never contributed and there's no 6% tax; the earnings are income in the year withdrawn. Otherwise you owe 6% each year on Form 5329.

Can I use my HSA to pay Medicare premiums?

Yes, if you're 65 or older: Part B, Part D and Medicare Advantage premiums are qualified expenses, along with other medical costs, all tax-free. Medigap premiums can't be paid tax-free from an HSA.

HSAs and Medicare: The 6-Month Rule

From the first month you're enrolled in any part of Medicare, including premium-free Part A, your HSA contribution limit is zero, and that covers your employer's contributions as well as yours. If you apply for Medicare or Social Security after 65, Part A starts up to 6 months back (but not before the month you turned 65), so stop contributing 6 months before you apply. If you've already put in too much, withdraw the excess and its earnings by that year's tax-return due date, including extensions, and you avoid the 6% excise tax.

Why six months?

Medicare.gov says that if you sign up after 65, Part A coverage starts 6 months before the month you apply for Medicare or Social Security, but no earlier than the month you turned 65. IRS Publication 969 says that beginning with the first month you're enrolled in Medicare, your HSA contribution limit is zero.

Put the two rules together and money you put into your HSA in the 6 months before you apply turns, after the fact, into contributions made while you were on Medicare. Many people assume that taking only premium-free Part A, without Part B, leaves the HSA alone. It doesn't: Part A alone ends eligibility.

Applying for Social Security after 65 also enrolls you in Part A automatically, and you can't drop Part A and keep Social Security. If you're still covered through current work at a large employer and want to keep funding the HSA, delay both.

How is the limit figured in the year Medicare starts?

The 2026 limits are $4,400 for self-only and $8,750 for family coverage, plus $1,000 at 55 or older (for 2027: $4,500 and $9,000, with the same $1,000). In the year Medicare starts, the limit is prorated: only months when you're eligible on the 1st (HDHP coverage and no Medicare) count, so you multiply the limit by eligible months and divide by 12. The $1,000 catch-up is prorated the same way.

The last-month rule, which treats you as eligible for the full year if you're eligible on December 1, doesn't help, because once you're on Medicare you aren't eligible on December 1.

Example (hypothetical numbers, to show the method)

Ms. Chen was born in April 1960 and turns 66 in April 2026. She works at a 300-person company with family HDHP coverage and hasn't signed up for Medicare or Social Security. In 2026 she contributes $750 a month through payroll and her employer adds $62.50, for $812.50 a month, aiming for the full $9,750 ($8,750 plus $1,000).

She retires on September 30 and applies for Social Security and Medicare at ssa.gov in October. Part A reaches back 6 months from October and starts April 1, 2026.

Her 2026 limit: she was eligible on the 1st of January, February and March, so her limit is $9,750 × 3 / 12 = $2,437.50.

What went in: January through September is 9 months, and $812.50 × 9 = $7,312.50.

The excess: $7,312.50 minus $2,437.50 is $4,875.

The fix: by April 15, 2027 (October 15 with an extension), she asks her HSA custodian for a return of excess contribution and withdraws the $4,875 plus the earnings on it, say $90. Because her payroll and employer contributions were kept out of her W-2 wages, the excess has to be added back to her 2026 taxable income, and the $90 is other income in the year she withdraws it. No 6% tax.

If she does nothing: she owes $4,875 × 6% = $292.50 of excise tax every year, reported on Form 5329, until the excess comes out. On Medicare her limit stays at zero, so there's no future room to absorb it; withdrawal is the only way out.

What she could have done: planning to apply in October, she should have stopped payroll contributions in April and told HR to stop employer contributions. Contributions for January through March, up to $2,437.50, were fine.

The application date changes the answer

The 6-month look-back can reach into the prior year. Someone who applies in May 2026 gets Part A from November 1, 2025, leaving only 10 eligible months in 2025. The 2025 self-only limit was $4,300 plus $1,000, so the prorated limit is $5,300 × 10 / 12 = $4,416.67. If they contributed the full $5,300 for 2025, the extra $883.33 needs fixing too, and the 2025 return deadline may already have passed unless they extended, so the correction and reporting need care.

On the other hand, someone applying near their 65th birthday can't be pushed back before the month they turned 65, so earlier months aren't affected.

Can the 6% be waived?

The Section 4973 excise tax on excess contributions has no reasonable-cause exception in the statute. The fix is timely withdrawal: take out the excess and its earnings by the due date of the return for the contribution year, including extensions, and the excess is treated as never contributed. If that deadline has passed, withdrawing now stops the 6% for later years, but the years already past still owe it.

Reporting: Forms 8889 and 5329

Form 8889: report the year's HSA contributions and deduction using the prorated limit. Excess you withdrew on time doesn't count as a contribution for the year.

Form 5329: figure the 6% excise tax on any excess you didn't withdraw in time, and file it every year until the excess is gone.

Already deducted the full amount? Amend the return to bring the deduction down to the prorated limit.

Can you still use the HSA once you're on Medicare?

Yes. You can't add money, but you can keep spending the balance tax-free on qualified medical costs. Publication 969 says that if you're 65 or older, Medicare premiums are qualified, including Part B, Part D and Medicare Advantage premiums, but not Medigap premiums.

If your spouse isn't on Medicare and is eligible with family HDHP coverage, your spouse can keep contributing to their own HSA, with the amount figured under the married-couple rules in Publication 969.

How we can help

YCL works out each year's prorated limit and any excess, coordinates the withdrawal with your custodian, prepares Forms 8889 and 5329, and amends returns when needed. If you haven't applied for Medicare yet, we count back from your retirement date to the month you should stop contributing. For enrollment timing, IRMAA and Medigap, see our Medicare guide. Start with a 15-minute free consultation, or reach us on WeChat at YCLUSA.