Once you reach age 65 your HSA funds can be withdrawn at any time and are only subject to ordinary income tax. However, you may avoid any tax by continuing to use the funds for qualified medical expenses.
For those over age 65, you can use your HSA to pay for:
- Medicare Part A premiums
- Medicare Part B premiums
- Medicare Part D (prescription drug plan) premiums and copays
- Medicare HMO, Medicare Advantage, or Medigap plan premiums
- Employee premiums for employer sponsored health insurance
However, although you can use your HSA to pay for Medicare Advantage plans, you CANNOT use your HSA to pay for Medicare Supplement Plan premiums.
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