Hardworking Seniors Act

The Hardworking Seniors Act (H.R. 10072) amends the Internal Revenue Code to allow adults who turn 65 and are enrolled in Medicare Part A to continue contributing money to a Health Savings Account (HSA). It also updates the tax rules and penalty structures for active HSA contributors who are age 65 or older.

* **Seniors aged 65 and older:** Specifically, individuals who are entitled to Medicare Part A based on their age and want to continue making contributions to an HSA. * **Federal Agencies:** The Department of the Treasury and the Internal Revenue Service (IRS), which are responsible for implementing and enforcing these tax rules.

* **HSA Contribution Eligibility:** Under current tax rules, enrolling in Medicare Part A reduces an individual's maximum HSA contribution limit to zero. This bill changes the rule to permit individuals aged 65 and older who are entitled to age-based Medicare Part A to remain "eligible individuals," allowing them to make contributions to an HSA. * **Penalties for Non-Medical Withdrawals:** Typically, the additional tax penalty for taking HSA money out for non-medical expenses disappears once a person turns 65. Under this bill, that penalty waiver will **not** apply to individuals over 65 who choose to remain active HSA contributors. If an active contributor over 65 uses HSA funds for non-medical expenses, they must still pay the additional tax penalty. * **Health Insurance Premium Payments:** The bill clarifies that using HSA funds to pay for health insurance premiums after age 65 is restricted to seniors who are **not** actively contributing to an HSA under the new rules. * **Implementation Timeline:** These changes are scheduled to take effect for months beginning after December 31, 2026, in tax years ending after that date.

The summary does not outline specific federal spending amounts, appropriations, or revenue projections for this bill. Money impacts are limited to individual tax adjustments: eligible seniors gain the benefit of tax-advantaged HSA contributions, while active contributors over 65 remain subject to tax penalties if they withdraw HSA funds for non-medical reasons.

* **Eligibility Scope:** The expanded HSA contribution rules specifically apply to individuals entitled to Medicare Part A because they reached age 65 under Section 226(a) of the Social Security Act. * **Loss of the Age-65 Penalty Exemption:** Seniors who choose to actively contribute to an HSA lose the standard age-65 exemption that removes the tax penalty on non-medical HSA distributions. * **Premium Payment Restrictions:** Active HSA contributors aged 65 or older cannot use their HSA funds to pay for health insurance premiums under these updated provisions.

Starting after December 31, 2026, seniors age 65 and older who are enrolled in Medicare Part A will be allowed to keep putting pre-tax money into a Health Savings Account, but those who continue contributing will still face tax penalties if they use HSA money for non-medical expenses.