A disability diagnosis, whatever the underlying condition, can be a source of fear and concern as you navigate a difficult medical situation. This article covers how your HSA works during this time.
Qualifying for Medicare
A qualifying disability may make you eligible for Medicare, even if you're under 65. You can find the official list of qualifying conditions here.
HSA contributions and Medicare enrollment
Once you enroll in Medicare, you'll need to stop HSA contributions. See Medicare enrollment and HSAs for the full timeline and how to avoid taxes and penalties.
Qualified medical expenses
Regardless of your plan, you can use your HSA to pay for qualified medical expenses. Check out our guide to Qualified Medical Expenses to see whether you'll need a Letter of Medical Necessity from your doctor.
HSA funds can generally be used to pay Medicare Part A and Part B premiums, but only once you're 65 or older. If you're on Medicare under 65 through disability, this exception doesn't apply to your own premiums yet.
Withdrawing funds before age 65
If you become disabled, you can withdraw HSA funds without the standard 20% early-withdrawal penalty that otherwise applies to non-qualified withdrawals, though the amount withdrawn is still taxable as ordinary income.