I am turning 65 next July and will be taking Medicare. I am currently on the CDHP plan. Do I need to change my plan during Annual Enrollment or will that be a special qualifying event in July?

You may stay enrolled in the CDHP plan and once you enroll in Medicare you can notify your ABC and Benefits Administration that you wish to cancel your coverage through the state-sponsored plan completely by submitting a cancel request form found here: https://www.tn.gov/content/dam/tn/finance/fa-benefits/documents/1047.pdf.  What is important for you to know, however, is that you may not provide the full IRS-approved HSA contribution to your HSA since you will not have HSA-approved coverage for the full 12 months of the year. 

The full HSA contribution amounts for 2018 are (and these include any employer contribution as well, if your agency provides such):

Single coverage       $3,450 + $1,000 catch up contributions if over 55 =$4,450                           

Family coverage      $6,900 + $1,000 catch up contributions if over 55 =$7,900

The final year’s HSA contribution is pro-rated in the year you turn 65. Example:

Jim was covered by a self-only CDHP and eligible for an HSA in 2018 but turned 65 on July 2, 2018, and enrolled in Medicare. Jim lost eligibility for an HSA as of July 1, 2018. For 2018, Jim was eligible for 6 months of the year. The federal HSA limit for Jim is $4,450 ($3,450 individual HSA limit plus a $1,000 catch-up). Accordingly, Jim’s calculation is 6/12 X $4,450 = $2,225. Jim’s maximum contribution for 2018 is $2,225. This amount also includes any employer contributions (if applicable) so be sure to subtract those from the total before you calculate your maximum contribution for the year.

Note: If you continue to work and are covered by one of the State health insurance plans or are covered by a creditable health plan through your spouse’s employer, you may want to consider delaying enrollment in Medicare Part A, Part B and Part D.

Medicare considers the State’s health insurance plans as ‘creditable’. This means if you delay enrollment until you terminate employment, Medicare will not assess a penalty for late enrollment. When you do enroll in Medicare, you may be asked by Medicare to provide proof you were enrolled in a health insurance plan through your employer.

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