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How Is Coverage Impacted As Husband Turns 65?

Question: I am currently working with a High Deductible Health Plan that 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 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 pre-tax 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 $4150 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. Once your husband turns 65 you and your employer can no longer contribute to the HSA on his behalf, so your maximum contribution would become $5150, if over 55.

Once 65 and therefore Medicare eligible, you can no longer contribute into an HSA. Your contribution amount needs to be adjusted to reflect this rule. This 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 $5150 (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 has no premium. Medicare Part B has a monthly premium of $174.70 for most individuals. Medicare Part A (Hospital coverage) has a deductible of $1632 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 Chautauqua and Cattaraugus counties with Medicare. So, it would be impossible for me to describe them all in this one article. That means there are many options available to your husband, if he were to leave your employer provided HDHP. He should investigate his Medicare 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 Medicare Part A & B, he would contact Social Security Administration (SSA) to sign up for Medicare. At that point when his card arrives, he could stay in your plan and have Medicare, or he could drop off your plan and choose his own coverage. Your employer provided HDHP, may have a reduction in the premium and would cover just you. His Medicare 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 offers your husband and impacts your HDHP provided by your employer.

Janell Sluga is a Geriatric Care Manager helping seniors in our community access services and insurance. To reach her, please email editorial@post-journal.com.

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