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Got a call from and met with a 66 year-old guy about to retire, wants my help with a supplement. He took Part A only, secondary to his EGHP, when he turned 65 but continued to contribute to an HSA. I explained to him that once he took Part A he forfeited his ability to contribute to the HSA and should not have taken Part A while working and contributing to his HSA account.
In the past I've stopped a few prospects who were still working from enrolling in Part A so they could continue to contribute to their HSA, but this is the first time I've run across someone who is already enrolled in Part A who continued to contribute to an HSA.
He wants to know what consequences he's looking at and whether there is any way anyone would even know. I referred him to his employer's benefits administrator and told him I'd research it, as I just don't know, though I assume the IRS would have some penalty for this. Thought I'd start that research here. Anyone else run across this before who can give an idea of what he can expect, if anything?
One added note: this guy's employer has 20 or more employees and he is not drawing Social Security benefits. Declining Part A while collecting SS benefits has negative consequences of its own so I am careful to clarify this before advising anyone to postpone taking Part A.
In the past I've stopped a few prospects who were still working from enrolling in Part A so they could continue to contribute to their HSA, but this is the first time I've run across someone who is already enrolled in Part A who continued to contribute to an HSA.
He wants to know what consequences he's looking at and whether there is any way anyone would even know. I referred him to his employer's benefits administrator and told him I'd research it, as I just don't know, though I assume the IRS would have some penalty for this. Thought I'd start that research here. Anyone else run across this before who can give an idea of what he can expect, if anything?
One added note: this guy's employer has 20 or more employees and he is not drawing Social Security benefits. Declining Part A while collecting SS benefits has negative consequences of its own so I am careful to clarify this before advising anyone to postpone taking Part A.
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