An individual who is entitled to Medicare Is not HSA-Eligible. There’s more to it though. An individual can become entitled to Medicare benefits for three reasons: age, disability, or end-stage renal disease (ESRD). Entitlement to Medicare Part A is automatic for some individuals (i.e., a separate application is not required) because they have already applied for and are receiving Social Security or Railroad Retirement Act benefits. Other individuals must file an application in order to become entitled to Part A benefits. Note that mere eligibility for Medicare benefits (without enrollment) will not disqualify an individual from HSA eligibility.

The terms “eligible” and “entitled” are not synonymous under the Medicare regulations.* To be entitled to Medicare, an individual generally must be both eligible and enrolled. Medicare enrollment is automatic for some individuals (e.g., individuals who are receiving Social Security benefits); they simultaneously become eligible, enrolled, and entitled. Other individuals are eligible for Medicare but must file an application in order to be entitled to benefits (e.g., working individuals beyond age 65 who are eligible to receive Social Security benefits but who have not applied for them). For HSA purposes, Code §223(b)(7) states that an individual’s contribution limit becomes zero “for the first month such individual is entitled to benefits” under Medicare. IRS Notice 2004-50 and IRS Notice 2008-59 clarify that mere eligibility for Medicare does not make an individual ineligible to contribute to an HSA and that a Medicare-eligible individual who is not actually enrolled in Medicare Part A, Part B, Part D, or any other Medicare benefit may contribute to an HSA until the month that he or she is enrolled in Medicare.

2020 HSA Contribution Limits

The Internal Revenue Service (IRS)  has released the 2020 inflation-adjusted amounts for Health Savings Accounts (HSAs). Contribution limits, minimum deductibles, and the maximum for out-of-pocket expenses all go up next calendar year.

2020 HSA Contribution Limits

Starting January 1, 2020, annual maximum contribution levels will rise for both individual and family coverage. Account holders with individual coverage will be able to contribute $3,550, a $50 increase from 2019. Those with family coverage may contribute up to $7,100, a $100 increase from 2019.

Minimum Deductible for HDHPs

The IRS also raised the minimum deductible for qualified high deductible health plans (HDHPs). In 2020, the individual coverage minimum deductible is $1,400, up $50; the family coverage minimum deductible goes up to $2,800, a $100 increase.

Maximum for Out-of-Pocket Expenses 

The maximum limit for out-of-pocket expenses is going up in 2020, as well. Those with individual coverage will have a $6,900 limit, a $150 increase. Account holders with family coverage see a $300 increase to $13,800.

Catch Up Contributions

The 2020 catch up contribution limit remains the same, at $1,000, for those 55 years of age and older.

Have Questions? Call us today at 855-OCA-0777 or email sales@pretaxaccounts.com.

NJ Passes Commuter Benefit Law

 

This new ordinance would require employers with more than 20 employees to offer commuter benefits. OCA is offering reduced admin fees through December 31st, 2019. If signed up by December 31st, 2019 clients will receive our special pricing of just $1.50 per enrolled per month! Avoid the headaches and potential penalties! Sign up today. 

Register today's for OCA's 10th Annual Partner Conference! It will be held on September 12, 2019 at The Conference Center at Mercer. The day will be filled with CE credits, compliance updates, major announcements on consumer, employer, and broker enhancements, great speakers (including Ashley Gillihan), and prizes. Our partner conference is our small way of saying thank you to our clients and partners.

Register Here