Why
HSA money generally can't pay for insurance. Publication 969 makes an exception for Medicare and other health care coverage if you were 65 or older, other than a Medicare supplemental policy such as Medigap. In practice that includes Part A if you pay a premium, Part B, Part D and Medicare Advantage.
The age that matters is the account owner's. Publication 969 says that if you aren't 65 or older, Medicare premiums for a spouse or dependent who is generally aren't qualified medical expenses.
Once you're enrolled in Medicare you can't contribute to an HSA any more, but you can keep spending what's in it.
What to keep
- Medicare premium notices, or your SSA-1099, which shows premiums withheld from Social Security.
- Records of any premiums you paid directly.
Watch out for
- Medigap premiums don't count.
- Premiums you paid before you turned 65 don't fall under this exception.
If you plan to reimburse yourself later
IRS Notice 2004-50, Q&A 39, sets no deadline, as long as the expense came after your HSA was established and your records show it wasn't paid by another source or deducted on a tax return. See what records the IRS expects and how long to keep them.