New HSA Bill Could Help Working Medicare Enrollees

A new bill could open the door for U.S. workers over age 65 to put cash in health savings accounts.

H.R. 2769, the Stop Penalizing Working Seniors Act bill, would cut through a legal knot that now keeps most older workers from contributing to HSAs.

Rep. Rob Latta, R-Ohio, introduced the bill last week. He has three cosponsors, all of whom are Republicans.

What It Means

If Congress passes H.R. 2769 or a similar bill, it could make it easier for older, employed clients to use HSAs in retirement planning and post-retirement health cost planning.

The HSA Knot

Today, under federal law, people who want to contribute to HSAs must have high-deductible health plan coverage.

When U.S. workers turn 65 and begin collecting Social Security benefits, they are automatically enrolled in the Medicare Part A hospitalization insurance program.

Because Medicare Part A does not qualify as HSA-compatible health coverage, older workers cannot make any additional contributions to their HSAs, even if they plan to work for 20 more years.

The History

Latta introduced his first version of the Stop Penalizing Working Seniors Act bill, H.R. 908, in 2019, in the 116th Congress, and his second version of the bill, H.R. 5563, in 2021, in the 117th Congress.

Both of the earlier bills died in committee.

H.R. 5563 had a Senate companion bill, S. 380, which was introduced by Sen. Marco Rubio, R-Fla. The Senate companion bill had one Republican cosponsor and died in committee.