You may elect to change plans during annual enrollment prior to becoming Medicare eligible OR you may stay enrolled in the CDHP plan. Becoming entitled to Medicare allows you to cancel coverage completely if desired, but does not allow the ability to change to a different plan (i.e. Premier PPO). If you decide to cancel due to becoming Medicare eligible, once you enroll in Medicare then you should notify your ABC within 60 days that you want to cancel your medical coverage through the state-sponsored plan completely by submitting a cancel request form. The cancel request form can be found here: https://www.tn.gov/content/dam/tn/finance/fa-benefits/documents/1048_2019.pdf. What is important to know is that you may not provide the full IRS-approved HSA contribution to your HSA since you will not have HSA-approved coverage during the full 12 months of the year.
The full HSA contribution amounts in 2020 are (and these include any employer contribution as well, if your agency provides such):
Single coverage $3,550 + $1,000 catch up contributions if over 55 =$4,550
Family coverage $7,100 + $1,000 catch up contributions if over 55 =$8,100
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 HSA eligibility in 2020 but turned 65 on July 2, 2020, and enrolled in Medicare. Jim lost HSA eligibility as of July 1, 2020. In 2020, Jim was eligible 6 months of the year. The federal HSA limit Jim had was $4,550 ($3,550 individual HSA limit plus a $1,000 catch-up). Accordingly, Jim’s calculation is 6/12 X $4,550 = $2,275. Jim’s maximum contribution in 2020 is $2,275. 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.