What does JME do?
JME is a producing general agency. We work directly with group, individual, and Medicare clients. Other insurance agents also write business through our agency.
What insurance companies do you work with?
For group health products, we work with the major insurers in Texas: Blue Cross Blue Shield, UnitedHealthcare, and Baylor Scott & White. For group dental and vision, we also work with Humana. For individual health, we normally recommend Blue Cross Blue Shield since all individual plans are HMOs and they have the largest network. And for Medicare supplements, we like Blue Cross Blue Shield due to their stable rate history and great customer service.
Where is JME licensed?
JME is licensed in the state of Texas. We have happy clients across the state.
Can I buy insurance any time of year?
Employers can purchase group insurance plans to start the 1st or 15th of any month. Individuals and families must sign up during the annual Open Enrollment Period (Nov 1 – Dec 15) unless you have a qualifying event, like loss of other coverage. Medicare recipients can purchase a supplement for the first 6 months after signing up for Part B without answering medical questions and can apply any time of the year after that. After your initial enrollment, Medicare Advantage and Part D plans can be changed once a year during the Annual Election Period (Oct 15 – Dec 7).
How do I get a quote?
It’s easy. Give us a call at (972) 245-0266 or click here.
How much does it cost to use a broker?
It doesn’t cost anything extra to use a broker. For fully-insured plans, the premium you pay is the same whether you use a broker or not. You can view our Compensation Disclosure statement here.
What insurance products does JME sell?
At JME, we sell both large and small employer-sponsored health, dental, vision, life, and disability coverage. For individuals and families, we sell health, dental, and vision coverage. And for Medicare recipients, we sell Medicare supplements and can help you find a Part D drug plan. We have a referral partner if you’re interested in Medicare Advantage plans.
Do we need to meet in person for me to buy insurance?
We certainly can meet in person if you would prefer that, but most of our clients prefer to do business by phone or via Teams/Zoom meeting. Whatever works best for you.
Is health insurance expensive?
Unfortunately, yes. But our team of experienced agents will work hard to find you a plan tht fits within your budget.
Is financial assistance available?
For most employer-sponsored plans, the company pays a portion of your health insurance premium. If you don’t have coverage available through your employer, you might qualify for a premium tax credit to help pay your monthly bill. Eligibility is based on your household income and family size.
More Frequently Asked Questions
Select the Category you’re interested in.
Medicare is a federal health insurance program primarily for people age 65 and older. It also covers certain individuals under 65 who have received Social Security disability benefits for at least two years, and people of any age diagnosed with End-Stage Renal Disease (ESRD).
The program was signed into law in 1965 and has evolved over time. Major milestones include the creation of Medicare Advantage plans through the Balanced Budget Act of 1997 and the addition of prescription drug coverage (Part D) via the Medicare Modernization Act of 2003.
“Original Medicare” includes two parts: Part A, which covers hospital-related expenses, and Part B, which covers outpatient medical services like doctor visits and preventive care. While these two parts form the foundation of Medicare, they don’t cover everything—there are deductibles, coinsurance, and no cap on out-of-pocket spending. That’s why most people choose to add coverage through either a Medicare Supplement (Medigap) policy or a Medicare Advantage plan, depending on their needs and preferences.
Medicare Part A is often called your hospital coverage. It primarily helps pay for inpatient care and other medically necessary services provided in a facility setting. While Part A covers hospital facility charges, keep in mind that doctors who treat you in the hospital usually bill separately under Medicare Part B.
Here’s what’s generally covered under Part A:
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Inpatient hospital care – Includes your room, meals, general nursing, and other hospital services and supplies during an admitted stay.
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Skilled nursing facility (SNF) care – Covers short-term rehab after a hospital stay if you need skilled nursing or therapy services.
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Nursing home care – Only covered when skilled nursing care is medically necessary. Custodial care (help with activities of daily living like bathing or eating) is not covered, even if provided in a nursing home.
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Hospice care – If you’re terminally ill and forgo curative treatment, Part A covers hospice services focused on comfort and quality of life.
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Home health services – May be covered for a limited time if you need skilled care and are homebound.
💡Important: Medicare does not pay for long-term custodial care, whether in a facility or at home. This includes help with day-to-day tasks unless skilled care is also needed.
Medicare Part A, often referred to as “hospital insurance,” is typically premium-free for individuals who have worked and paid Medicare taxes for at least 40 quarters (equivalent to 10 years), or who are married to someone who has. During your working years, you and your employer each contribute 1.45% of your wages to fund Medicare Part A.
If you have fewer than 40 quarters of Medicare-covered employment, you can still enroll in Part A by paying a monthly premium. In 2025, the premium rates are as follows:
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$285 per month for individuals with 30–39 quarters of coverage.
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$518 per month for those with fewer than 30 quarters of coverage.
Generally, if you’re already receiving Social Security benefits when you turn 65, you’ll be automatically enrolled in Part A. If not, you can sign up through the Social Security Administration during your Initial Enrollment Period, which begins three months before the month you turn 65 and ends three months after.
Additionally, individuals under 65 may qualify for Medicare Part A if they have received Social Security Disability Insurance (SSDI) for at least 24 months or have been diagnosed with End-Stage Renal Disease (ESRD).
Medicare Part B is known as your medical coverage. It helps pay for outpatient and physician services, as well as many preventive services that can catch health issues early or help you avoid them altogether.
Part B covers two main types of care:
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Medically necessary services – Services or supplies needed to diagnose or treat a condition, based on accepted standards of medical practice.
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Preventive services – Routine care like screenings and vaccines to prevent illness or detect problems early. You usually pay nothing for these services if your provider accepts Medicare assignment.
Examples of what Part B covers include:
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Doctor visits – Includes outpatient visits and doctors who treat you in the hospital (even though the hospital stay itself is Part A).
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Outpatient surgery – Medical procedures that don’t require an overnight hospital stay.
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Clinical research – Participation in qualifying clinical trials.
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Ambulance services – Emergency transportation when other options would put your health at risk.
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Durable medical equipment (DME) – Items like wheelchairs, walkers, oxygen, or CPAP machines, when prescribed for use at home.
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Mental health care – Includes outpatient therapy, inpatient psychiatric care, and partial hospitalization programs.
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Second opinions before surgery – Medicare may cover a second (and sometimes third) opinion before certain procedures.
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Limited outpatient prescription drugs – Such as some cancer drugs, injectables, or medications given in a clinical setting.
Medicare Part B covers outpatient medical services like doctor visits, preventive care, durable medical equipment, and more.
Enrollment
If you’re already receiving Social Security benefits when you turn 65, you’ll typically be enrolled in Part B automatically. If not, you’ll need to sign up during your Initial Enrollment Period, which begins three months before the month you turn 65 and ends three months after.
If you delay enrollment without qualifying for a Special Enrollment Period (such as having employer-sponsored coverage), you may face a late enrollment penalty. This penalty adds 10% to your monthly premium for each full 12-month period you were eligible but didn’t enroll, and you’ll pay this higher premium for as long as you have Part B.
Costs in 2025
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Standard Monthly Premium: $185
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Annual Deductible: $257
After meeting the deductible, you typically pay 20% of the Medicare-approved amount for most services.
Income-Related Monthly Adjustment Amount (IRMAA)
If your Modified Adjusted Gross Income (MAGI) from two years ago (2023 for 2025 premiums) is above certain thresholds, you’ll pay an additional amount on top of the standard premium:
| Individual MAGI | Joint MAGI | Total Monthly Premium (2025) |
|---|---|---|
| $106,000 or less | $212,000 or less | $185.00 |
| $106,001 – $133,000 | $212,001 – $266,000 | $259.00 |
| $133,001 – $167,000 | $266,001 – $334,000 | $370.00 |
| $167,001 – $200,000 | $334,001 – $400,000 | $480.90 |
| $200,001 – $500,000 | $400,001 – $750,000 | $591.90 |
| $500,001 or more | $750,001 or more | $628.90 |
Note: If you’re married and file separately, different thresholds apply.
If you believe your IRMAA is incorrect due to a life-changing event (like retirement or loss of income), you can request a reconsideration from the Social Security Administration.
Medicare coverage start dates depend on when you sign up and which enrollment period you’re using. Signing up on time is important to avoid delays and potential penalties.
Initial Enrollment Period (IEP)
Your first opportunity to sign up for Medicare is called your Initial Enrollment Period. It lasts 7 months:
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Begins 3 months before the month you turn 65
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Includes your birthday month
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Ends 3 months after your birthday month
If you sign up before the month you turn 65, your coverage usually starts the month you turn 65.
If you sign up during or after your birthday month, coverage will start the following month.
Watch this short video from CMS to learn more:
Coverage Start Dates for Premium-Free Part A
If you qualify for premium-free Part A (usually by working and paying Medicare taxes for 10 years), your Part A coverage begins:
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The month you turn 65
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Or, the month before you turn 65 if your birthday is on the 1st of the month
You can also sign up for Part A after age 65, and coverage can be retroactive for up to 6 months, but it can’t start earlier than the month you turned 65.
Coverage Start Dates for Part B and Premium-Part A
If you sign up for Part B (or Premium-Part A):
| If you sign up… | Coverage starts… |
|---|---|
| Before your 65th birthday month | The month you turn 65 |
| During your birthday month or the 3 months after | The next month |
If you don’t sign up for Part B during your Initial Enrollment Period and don’t qualify for a Special Enrollment Period, you may pay a late enrollment penalty. This penalty is 10% for each full 12-month period you could have had Part B but didn’t—and it lasts as long as you have Part B.
Special Enrollment Periods (SEPs)
You may qualify for a Special Enrollment Period if certain life events delayed your enrollment. Examples include:
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Losing Medicaid coverage
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Having or losing job-based coverage
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Being impacted by a disaster or emergency
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Receiving incorrect info from an employer or health plan
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Recently being released from incarceration
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Serving as a volunteer outside the U.S.
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Having TRICARE coverage
Coverage during a Special Enrollment Period generally starts the month after you sign up, though in some cases you may choose an earlier or later start date. You’ll typically need to complete Form CMS-10797 and send it to your local Social Security office.
General Enrollment Period
If you miss both your Initial and any Special Enrollment Period, you can enroll during the General Enrollment Period:
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January 1 to March 31 each year
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Coverage begins the month after you sign up
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You may have to pay late enrollment penalties
A Note About HSAs (Health Savings Accounts)
If you have an HSA with a High Deductible Health Plan, you should stop contributing to your HSA at least 6 months before you apply for Medicare. That’s because:
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Part A coverage can start up to 6 months retroactively
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You’re not allowed to contribute to an HSA while enrolled in any part of Medicare
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If your Medicare Part A overlaps with HSA contributions, you may face tax penalties
You can continue to use HSA funds to pay for Medicare-related expenses like premiums, deductibles, and copayments—even after Medicare begins.
Even though you’ve contributed to Medicare Part A throughout your working years and pay monthly premiums for Part B, Original Medicare doesn’t cover all your medical expenses. There are significant gaps in both hospital and outpatient coverage, and prescription drug coverage must be purchased separately. These gaps can add up quickly, making it important to understand what’s not covered—and how to protect yourself from unexpected costs.
Part A Costs (Hospital Insurance) in 2025
Medicare Part A covers inpatient hospital stays, skilled nursing facility care, hospice, and some home health care. However, beneficiaries are still responsible for considerable out-of-pocket costs
| Part A Cost Type | 2025 Amount |
|---|---|
| Inpatient hospital deductible | $1,676 |
| Daily coinsurance for 61st–90th day | $419 per day |
| Daily coinsurance for lifetime reserve days | $838 per day |
| Skilled Nursing Facility coinsurance (days 21–100) | $209.50 per day |
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Inpatient Hospital Stay:
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Deductible: $1,676 per benefit period
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Days 1–60: $0 coinsurance after deductible
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Days 61–90: $419 per day
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Days 91–150: $838 per day (lifetime reserve days)
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Beyond 150 days: All costs
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Skilled Nursing Facility Care:
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Days 1–20: $0
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Days 21–100: $209.50 per day
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Days 101 and beyond: All costs
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Home Health Care:
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$0 for covered services
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20% of the Medicare-approved amount for durable medical equipment
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Hospice Care:
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$0 for hospice care
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Up to $5 for each prescription drug related to symptom control
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5% of the Medicare-approved amount for inpatient respite care
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Note: Medicare does not cover custodial care (assistance with bathing, dressing, eating, etc.) when that is the only care you need, whether at home or in a facility.
Part B Costs (Medical Insurance) in 2025
Medicare Part B covers doctor visits, outpatient services, preventive care, and certain home health services. It also comes with its own set of out-of-pocket costs.
| Part B Cost Type | 2025 Amount |
|---|---|
| Standard monthly premium | $185.00 (higher for high-income earners) |
| Annual deductible | $257 |
| Coinsurance | 20% of Medicare-approved amount (after deductible) |
| Out-of-pocket maximum | None under Original Medicare |
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Standard monthly premium: $185 (may be higher based on income)
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Annual deductible: $257
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After the deductible, you generally pay 20% of the Medicare-approved amount for covered services
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No out-of-pocket maximum under Original Medicare
This 20% coinsurance applies to most doctor visits, outpatient procedures, durable medical equipment, mental health services, and more. Since there’s no cap on what you might pay in a given year, large medical bills can quickly become a burden.
Prescription Drug Coverage (Part D) in 2025
Original Medicare does not cover most prescription medications. For that, you’ll need to enroll in a stand-alone Part D plan or choose a Medicare Advantage plan that includes drug coverage.
In 2025, there is a new out-of-pocket cap of $2,000 for covered prescription drugs under Part D plans. Once you reach that limit, you won’t pay anything more for covered medications for the rest of the year.
How to Fill the Gaps
To manage these costs, most people enroll in either:
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A Medicare Supplement Insurance (Medigap) policy, which helps pay your deductibles, coinsurance, and other out-of-pocket expenses under Original Medicare; or
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A Medicare Advantage Plan (Part C), which often includes additional benefits like dental, vision, hearing, and prescription drug coverage—but comes with its own provider networks and rules.
Taking time to compare your options can help you choose a coverage strategy that fits your health needs and budget.
Medicare Parts A and B, known as Original Medicare, do not cover most prescription drugs. To obtain prescription drug coverage, you can enroll in a Medicare Part D plan.
Part D coverage is available in two ways:
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Stand-alone Prescription Drug Plans (PDPs): These plans complement Original Medicare and any Medigap (Medicare Supplement) coverage you may have.
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Medicare Advantage Plans (Part C): Many of these plans include Part D coverage, combining hospital, medical, and prescription drug coverage into one plan.
When selecting a Part D plan, consider the following factors:
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Formulary: The list of covered drugs can vary between plans.
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Monthly Premiums: Costs can differ based on the plan and coverage.
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Copayments and Coinsurance: Out-of-pocket costs at the pharmacy.
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Plan Reputation: Consider the insurance company’s customer service and plan ratings.
Unlike Medigap policies, you can change your Part D plan annually during the Annual Election Period (October 15 – December 7) without medical underwriting.
2025 Part D Costs and IRMAA Surcharges
In 2025, the national base beneficiary premium for Part D is $36.78. Your actual premium may be higher or lower, depending on the plan you choose.
If your income exceeds certain thresholds, you may be subject to an Income-Related Monthly Adjustment Amount (IRMAA), which is an additional charge on top of your plan’s premium. The Social Security Administration determines IRMAA based on your reported income from two years prior.
Here’s a breakdown of the 2025 IRMAA brackets:
| Income Range (Individual) | Income Range (Married Filing Jointly) | Monthly IRMAA |
|---|---|---|
| $106,000 or less | $212,000 or less | $0 |
| $106,001 – $133,000 | $212,001 – $266,000 | $13.70 |
| $133,001 – $167,000 | $266,001 – $334,000 | $35.30 |
| $167,001 – $200,000 | $334,001 – $400,000 | $57.00 |
| $200,001 – $500,000 | $400,001 – $750,000 | $78.60 |
| Above $500,000 | Above $750,000 | $85.80 |
Note: These IRMAA amounts are in addition to your plan’s monthly premium.
Additional Information
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Payment of IRMAA: If you owe an IRMAA, you’ll receive a notice from Social Security. This amount is typically deducted from your Social Security check. If not, you’ll receive a bill from Medicare or the Railroad Retirement Board. It’s important to pay this amount to maintain your Part D coverage.
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Premium Deductions: You can choose to have your Part D premium deducted from your monthly Social Security payment. Contact your drug plan (not Social Security) to set this up. The first deduction may take up to three months to start, and multiple months’ premiums might be deducted at once initially.
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Appealing IRMAA: If you experience a life-changing event (e.g., retirement, loss of income, marriage, divorce), you can request a reduction in your IRMAA. To do so, complete Form SSA-44 and submit it to the Social Security Administration.
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Out-of-Pocket Cap: Starting in 2025, out-of-pocket costs for prescription drugs under Part D will be capped at $2,000 annually. This means once you spend $2,000 out-of-pocket on covered drugs in a year, you won’t pay more for your medications for the remainder of that year. The cap does not apply to non-covered / non-formulary drugs.
When given the option of enrolling in an HSA-compatible health plan, the first question most people ask is, What is an HSA?
Well, the government says that if you have a specific type of health insurance plan, then you can set up a savings account to pay for eligible expenses with tax-free dollars. The type of health plan is called a high-deductible health plan, and the savings account is called a health savings account, or HSA.
Contribution Limits
With an HSA, you’re allowed to contribute up to $4,300 in tax-free money to your account if you have single coverage, and up to $8,550 if you have family coverage. That’s a plan covering you and at least one other person.
If you’re over the age of 55, you can also contribute an additional $1,000 per year in catch-up contributions.
Flexibility in Contributions
HSAs are very flexible. For instance, you’re allowed to make contributions all the way up until the tax filing deadline, April 15th of most years, in equal installments or one lump sum, however you would like.
You do not have to have a crystal ball like you have to have with other types of accounts. You don’t have to know at the beginning of the year how much you’ll spend on medical expenses. Instead, you just need to make sure your account is established and that you can contribute the funds after you have incurred a claim.
Use-It-or-Keep-It
An HSA is not a use-it-or-lose-it account like a flexible spending account is. Instead, it is a use-it-or-keep-it account. Unused funds roll over from year to year, and they tend to grow over time as you continue to make additional deposits, and your account earns tax-free interest or investment income.
Portability and Ownership
An employee owns the account permanently. An HSA is portable, which means that you take it with you when you leave a job. You also have the option of using those HSA funds at the point of service or paying with after-tax dollars and then reimbursing yourself from your HSA at a later date, even in future years.
Budgeting for Medical Expenses
With an HSA, you get a tax break when you make the deposit to the account, and it allows you to budget for future medical expenses. Think of it as a rainy-day fund.
The Triple-Tax Benefit
An HSA is the only account out there with a triple-tax benefit:
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You get a tax break when you put the money into the account.
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The funds grow on a tax-free basis over time.
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As long as you withdraw your HSA funds for qualified medical expenses, they’re always tax-free.
A 401(k) or an IRA grows tax-free. However, you do pay a tax whenever you take the money out. With an HSA, there is no tax.
If you’re considering setting up a health savings account, you’re probably wondering how an HSA-compatible plan differs from a regular health plan.
Requirement: High-Deductible Health Plan (HDHP)
To open and contribute to an HSA, you must be enrolled in a High-Deductible Health Plan (HDHP). While the term “high-deductible” may sound intimidating, the minimum deductibles for HSA-qualified plans aren’t as high as you might expect.
For 2025, an HSA-qualified plan must have at least:
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$1,650 deductible for individual coverage
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$3,300 deductible for family coverage
That’s not significantly higher than many traditional plans today, which is why a better term might be “HSA-qualified plan” rather than high-deductible.
Deductible and Out-of-Pocket Limits
Along with a minimum deductible, HSA-qualified plans have maximum out-of-pocket limits, which cap how much you’ll pay in total for covered services during the plan year.
For 2025, the limits are:
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$8,300 for individual coverage
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$16,600 for family coverage
These limits include deductibles, coinsurance, and other cost-sharing, but do not include premiums.
Key Differences from Traditional Plans
The biggest distinction between HSA-qualified plans and traditional health plans is how you pay for services before reaching your deductible.
With traditional plans, you often have fixed copayments (like $30 to see a doctor) before hitting your deductible. But with an HSA-qualified plan, you generally pay the full negotiated rate for non-preventive services—no copays—until you meet your deductible. That full amount counts toward your out-of-pocket max.
This approach is part of what makes HSA-compatible plans HSA-eligible: IRS rules don’t allow those first-dollar copays unless they’re for preventive care.
Preventive Care Coverage
Preventive care—like screenings, vaccines, and annual physicals—is typically covered at 100% on HSA-qualified plans, as required by the Affordable Care Act. You won’t pay anything out of pocket for these services, even if you haven’t met your deductible.
A Health Savings Account (HSA) allows you to pay for eligible medical expenses with tax-free dollars—but what types of expenses qualify?
Doctor Visits and Prescriptions
With an HSA, you typically don’t have upfront copayments for doctor visits or prescriptions. Instead, you pay the full (discounted) cost of services, and those out-of-pocket expenses can be reimbursed tax-free from your HSA. But qualified HSA expenses go far beyond what’s covered by your health insurance plan.
Dental, Vision, Hearing, and Chiropractic Care
You can also use your HSA funds to pay for services that are often not covered by insurance, including:
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Dental visits and procedures
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Eye exams, glasses, and contact lenses
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Hearing exams and hearing aids
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Chiropractic care
Insurance Premiums
HSA funds can be used to pay for certain insurance premiums, including:
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COBRA continuation coverage
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Individual health insurance premiums while receiving unemployment benefits
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Qualified long-term care insurance
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Medicare Part B and Part D premiums (but not Medicare Supplement premiums)
Expenses for Non-Covered Dependents
You can use your HSA to pay for medical care for your spouse or dependents, even if they aren’t enrolled in your health plan. For example, you can use HSA funds to take your children to the doctor or dentist, regardless of their insurance coverage.
Over-the-Counter Items
Over-the-counter drugs and medications are once again eligible HSA expenses—even without a prescription. This includes common items like pain relievers, allergy medication, cold and flu remedies, and more. You can also use your HSA to purchase over-the-counter medical supplies such as:
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Bandages and first aid kits
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Thermometers and blood pressure monitors
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Contact lens solution
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Sunscreen (SPF 15 or higher)
Where to Find a Full List of Eligible Expenses
This is just a partial list of qualified medical expenses. For a more comprehensive list, refer to IRS Publication 502, which is updated annually. You can find it by visiting irs.gov and searching for “Publication 502.”
Why HSAs Are Popular
HSAs have grown in popularity in recent years because a health savings account allows you to pay for qualified medical expenses with tax-free dollars.
Who Is Eligible to Set Up an HSA?
There are four requirements to be considered an HSA-eligible individual:
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You must be an adult.
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You cannot be claimed as a dependent on somebody else’s tax return.
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You must have an HSA-qualified high-deductible health plan.
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You cannot have other health coverage that would pay prior to the minimum HSA-qualified plan deductible.
Types of Disqualifying Coverage
Coverage that can make you ineligible for an HSA includes:
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Medicare or Medicaid
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Health coverage through a spouse
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A flexible spending account (FSA) that your spouse has and can use on your expenses
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VA benefits, if they’ve been used in the last 90 days
Meeting All Requirements
If you meet all four of the above requirements, then you are eligible to:
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Set up a health savings account
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Deposit tax-free dollars
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Use those funds for eligible medical expenses
Do You Have to Be the Primary on the Insurance?
There is no requirement to be primary on the insurance to set up and contribute to an HSA.
That’s an important point, so again:
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You do not need to be the primary insured.
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You just need to be an adult with an HSA-qualified high-deductible health plan,
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Not be claimed as a dependent,
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And not have disqualifying coverage.
HSA Rules for Married Couples
Married couples can choose to:
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Set up one or two HSAs
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Split the family contribution however they would like between the two accounts
However:
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Catch-up contributions (for those age 55 and older) must go into an account in that individual’s name
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A couple where both spouses are 55 or older should consider setting up separate HSAs
One common question people have when they have a health savings account is how much they can contribute to their HSA.
Contribution Limits Based on Coverage Type
The answer depends on whether you have single or family coverage on your HSA-qualified high-deductible health plan:
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If just one person is covered, you have single coverage.
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If more than one person is covered, you have family coverage.
In 2025:
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A person with single coverage can contribute up to $4,300 per year.
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Someone with family coverage can contribute up to $8,550 per year.
Both amounts are adjusted annually for inflation.
Catch-Up Contributions for Age 55+
If you are age 55 or older, you can make an additional catch-up contribution of up to $1,000 per year to your HSA.
This catch-up amount is not adjusted for inflation.
Who Can Contribute?
Anyone can contribute to a health savings account:
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The individual account holder
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The employer, on the account holder’s behalf
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Family members, such as parents or a spouse
For example, a married couple might contribute to their daughter’s HSA after she graduates from college to help kick-start the account. That’s a great gift—but in this case, the daughter is the one who receives the tax deduction, not the parents.
Contribution Limits Apply to All Sources
Regardless of who makes the contributions, the total annual contribution to your HSA (from all sources combined) is limited based on whether you have single coverage or family coverage
With a health savings account, you can pay for eligible medical expenses with tax-free dollars. But what happens if you use your HSA funds to pay for an ineligible expense?
Penalties for Ineligible Expenses Before Age 65
For account holders under the age of 65, if they spend HSA money on ineligible expenses:
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They’ll owe taxes on that money
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Plus a 20% penalty on the amount that exceeds their eligible expenses
Example:
If a total of $500 was withdrawn from an HSA during the year, but the account holder only has receipts for eligible expenses totaling $300, then:
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The excess $200 is reported as taxable income
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A 20% penalty (or $40) is applied to the excess withdrawal
Using Prior Eligible Expenses to Offset Ineligible Withdrawals
Previous eligible expenses—incurred after the HSA was established but paid out-of-pocket with after-tax dollars—can be used to offset ineligible HSA withdrawals.
Example:
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Suzy has an HSA-qualified plan in 2025 and sets up her HSA.
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She visits the doctor and the bill (after the insurance discount) is $100.
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Instead of using her HSA, she pays with a regular debit card and saves the receipt.
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In 2026, she can withdraw $100 from her HSA and spend it however she likes—even if the new expense is not eligible—because she already has a $100 eligible expense on file that she paid out-of-pocket.
What Happens After Age 65?
There are no penalties for using HSA funds on ineligible expenses after age 65.
At that point:
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The HSA functions much more like an IRA
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Ineligible expenses are taxed, but not penalized
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Eligible expenses remain tax-free
Annual HSA Contribution Limits: Each year, the IRS announces the maximum amount that an HSA account holder can contribute to a health savings account. If an individual is eligible for the entire calendar year (January 1st to December 31st), they may contribute the full maximum amount, depending on their age and coverage type.
Catch-Up Contributions for Age 55+: In the year a person turns 55, they are eligible to make the full $1,000 catch-up contribution, regardless of when their birthday falls—as long as they have qualified coverage for the full year.
This $1,000 catch-up amount does not need to be prorated.
But what happens if an individual’s HSA-eligibility ends before the end of the year, or if they don’t become eligible until later in the year?
Partial-Year Eligibility and Prorated Contributions
If HSA eligibility ends before December 1st, special rules apply.
If someone loses or drops their HSA-qualified coverage before December 1st, they must prorate their contribution based on the actual months of coverage.
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Any excess contributions and earnings on those contributions must be reported as taxable income
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They are subject to a 6% penalty for each year the excess remains in the account
Good news: Excess contributions can be withdrawn before the tax filing deadline (April 15th) with no penalty.
Example: Partial-Year Eligibility (Bob)
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On January 1st, 2019, Bob elects single HSA-qualified coverage through his employer
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He is covered from January through May, then loses his job and does not elect COBRA
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He joins his wife’s non-HSA-qualified plan and becomes ineligible for an HSA
Because his eligibility ended before December 1st, Bob must prorate his contribution:
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2019 single coverage max = $3,500
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$3,500 ÷ 12 = $291.67/month
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Covered for 5 months: 5 × $291.67 = $1,458.33
If Bob contributed more than $1,458.33, he must withdraw the excess by April 15th to avoid taxes and the 6% penalty.
The Last Month Rule
If an individual is eligible on December 1st, they may use the “last month rule” (also called the full contribution rule).
This rule treats the person as having had that level of coverage for the entire calendar year.
So, if someone has family coverage on December 1st, they can contribute the full family maximum, even if they were only eligible for part of the year.
Example: Last Month Rule (Suzy)
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On August 1st, 2019, Suzy signs up for single HSA-qualified coverage
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On October 1st, she adds her husband Gary to the plan (now family coverage)
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On December 1st, she has family coverage, so she can contribute the full $7,000 for 2019
Prorated example for comparison:
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$3,500 single ÷ 12 = $291.67/month
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$7,000 family ÷ 12 = $583.33/month
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Suzy had 2 months single + 3 months family =
(2 × $291.67) + (3 × $583.33) = $2,333.33
Using the last month rule, Suzy may contribute the full $7,000 instead of $2,333.33.
Testing Period Requirement
To use the last month rule, the account holder must remain HSA eligible for the entire following calendar year (the testing period).
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In Suzy’s case, if she uses the rule in 2019, she must remain eligible through all of 2020
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If she loses eligibility during 2020, any amount she contributed above the prorated amount ($2,333.33) becomes taxable
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She must also pay a 10% penalty on the excess
Summary of Testing Period Rules
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Applies when contributing more than the prorated amount using the last month rule
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Must remain HSA-eligible through December 31st of the following year
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Coverage can be self-only or family, as long as it’s HSA-qualified
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Failure to meet the testing period =
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Excess contribution becomes taxable income
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Subject to a 10% excise tax
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Is an HSA Right for Me?
As HSAs continue to grow in popularity, a lot of people want to know, how do I decide if an HSA is right for me?
Three Types of Health Care Consumers
Well, if you think about it, there are three types of health care consumers:
1. Low Utilizers
At one end of the spectrum, you have low utilizers who rarely use their health insurance benefits.
An HSA allows them to:
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Save money by paying a lower premium
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Use some of that savings to pay for other expenses with tax-free dollars, rather than sending it to the insurance company
For these folks, an HSA is really a no-brainer.
2. High Utilizers
At the other end of the spectrum, you have high utilizers.
Because all expenses on an HSA-qualified plan apply to the deductible and out-of-pocket, these folks often end up spending less over the course of the year than on a traditional plan.
You can have the same out-of-pocket protection on an HSA-qualified plan as you do a traditional plan, but:
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With an HSA, you pay a lower health insurance premium
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And you can pay for eligible expenses with tax-free dollars
3. Medium Utilizers
In the middle, of course, you have medium utilizers.
It’s not always clear for this group, but:
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After factoring in the premium and tax savings
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A medium utilizer often ends up benefiting from selecting an HSA-qualified plan
HSAs Work for Many People
Since an HSA is right for so many people, HSAs have continued to grow regardless of who’s in office.
Smart Consumers Compare Options
It’s not enough, though, to just have a health savings account.
The most successful health care consumers are those who are:
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Willing to compare their options
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And go outside of the health plan when necessary if they find a better deal
What Happens If You Lose HSA Eligibility?
Some people worry that they will lose the money in their health savings account if they ever lose their HSA-qualified high-deductible health plan.
Your HSA Belongs to You
Well, remember, the money in your health savings account belongs to you, the account holder.
It’s your money to keep and continue to use regardless of the type of health coverage you have.
Eligibility and Contributions
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If you have an HSA-qualified high-deductible health plan, then you can contribute to the health savings account.
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If you ever become ineligible, either because you lose your job or because your employer switches to a non-HSA-qualified plan, you can continue to spend the funds in your HSA.
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You just can’t make any additional deposits.
Regaining Eligibility
If you do once again become HSA-eligible, then you can resume your HSA contributions.
What Happens to My HSA When I Die?
One common question that people with a health savings account have is, what happens to my HSA when I die?
It Depends on Your Beneficiary
Well, the answer depends on who your beneficiary is.
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If your spouse is the beneficiary, then he or she would inherit the HSA as a health savings account and would be able to continue to use the funds for qualified medical expenses.
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If anyone else is designated as the beneficiary, then:
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The HSA will be cashed out
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The government will keep its share since the funds were never taxed in the first place
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The beneficiary will receive the remaining amount as cash, not as an HSA
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Medicare is a federal health insurance program primarily for people aged 65 and older, although some younger individuals with certain disabilities or conditions may also qualify. It helps cover hospital stays, doctor visits, and other medical services. There are different parts of Medicare that work together—or with other coverage—to help you manage your health and medical costs.
Medicare Part A helps pay for inpatient care in hospitals, skilled nursing facilities (after a hospital stay), hospice care, and some home health services. Most people don’t pay a premium for Part A if they or their spouse worked and paid Medicare taxes for at least 10 years.
If you’re already receiving Social Security or Railroad Retirement benefits, you’ll usually be enrolled in Part A automatically at age 65. Most people don’t pay a premium, but if you haven’t paid enough into Medicare, you may have to buy it. Even with premium-free Part A, you’ll still be responsible for deductibles and coinsurance when you use it.
Part B covers outpatient care like doctor visits, preventive services, lab work, durable medical equipment, and some home health services. It complements Part A by covering care outside the hospital. Most people pay a monthly premium for Part B, which is income-based.
You’ll be automatically enrolled in Part B if you’re already receiving Social Security benefits. If not, you’ll need to sign up during your Initial Enrollment Period. The standard monthly premium is $174.70 in 2025, but people with higher incomes may pay more. There’s also an annual deductible, after which Medicare generally pays 80% of approved services.
Your Medicare coverage typically begins the first day of the month you turn 65—if you sign up during the three months before your birthday month. Delaying enrollment can delay your coverage start date, so it’s important to understand your timeline and apply on time. If you’re automatically enrolled, you’ll get your Medicare card in the mail about three months before your coverage begins.
Original Medicare doesn’t cover everything. You’ll still pay deductibles, copays, and 20% of most medical bills. It also doesn’t cover most prescriptions, dental, vision, hearing aids, or long-term care. That’s why many people choose to add a Medicare Supplement and a Part D drug plan.
Medicare Part D provides prescription drug coverage through private insurance companies. Costs vary by plan and include monthly premiums, copays, and sometimes a deductible. You can get Part D as a standalone plan or bundled into a Medicare Advantage plan.
A Health Savings Account (HSA) is a special tax-advantaged account available to people enrolled in a high-deductible health plan (HDHP). You can use it to pay for qualified medical expenses with tax-free dollars. In 2025, you can contribute up to $4,300 if you have self-only coverage, or up to $8,550 for family coverage, plus an extra $1,000 if you’re age 55 or older.
HSAs offer a triple-tax benefit: your contributions are tax-deductible, the money grows tax-free, and withdrawals for qualified medical expenses are tax-free. You own the account, the funds roll over year to year, and the money stays with you even if you change jobs or retire.
An HSA-qualified plan, or High-Deductible Health Plan (HDHP), is designed to be paired with a Health Savings Account (HSA). For 2025, these plans must have minimum deductibles of $1,650 for individual coverage and $3,300 for family coverage, with maximum out-of-pocket limits of $8,300 and $16,600, respectively.
Unlike traditional health plans, HDHPs typically don’t offer copayments for services like doctor visits or prescriptions before meeting the deductible. Instead, you pay the full discounted rate for services until the deductible is met. Preventive care, however, is covered at 100% without cost-sharing.
You can use HSA funds to pay for a wide range of eligible medical expenses tax-free—including doctor visits, prescriptions, dental and vision care, hearing services, and chiropractic visits. You can also use your HSA to pay for medical care for your spouse or dependents, even if they aren’t on your insurance plan.
In 2025, over-the-counter medications like pain relievers and allergy medicine are once again eligible expenses, even without a prescription. Certain insurance premiums—like COBRA, long-term care, and Medicare Part B and D—can also be paid with HSA funds.
To be eligible to open and contribute to a Health Savings Account (HSA), you must have an HSA-qualified high-deductible health plan, be an adult, not be claimed as a dependent, and avoid disqualifying coverage like Medicare or a spouse’s FSA. You don’t need to be the primary insured on the health plan, and married couples can split contributions or open separate accounts, especially if both are age 55 or older and want to make catch-up contributions.
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In 2025, you can contribute up to $4,300 if you have self-only coverage or up to $8,550 if you have family coverage under an HSA-qualified high-deductible health plan. If you’re age 55 or older, you can also make a $1,000 catch-up contribution.
These limits apply to the total contributions made by you, your employer, or anyone else on your behalf.
If you use HSA funds for non-qualified expenses before age 65, you’ll owe income tax on the amount plus a 20% penalty. After age 65, the penalty goes away, though taxes still apply to ineligible withdrawals. However, you can offset ineligible expenses with eligible ones you paid out-of-pocket in previous years—as long as they occurred after your HSA was established.
If you’re only HSA-eligible for part of the year, your contribution limit may need to be prorated to avoid a 6% penalty. This usually applies when your eligibility ends before December 1. However, if your eligibility begins later in the year and you’re covered by an HSA-qualified plan on December 1, you may be able to use the “last month rule” to contribute the full annual amount. Just keep in mind: to avoid taxes and a 10% penalty, you’ll need to remain HSA-eligible for the entire following calendar year.
HSAs can be a smart choice for many people—including those who rarely use their insurance, those who use it often, and even those in between. Low utilizers benefit from lower premiums and tax savings, while high utilizers can still save overall by paying for care with pre-tax dollars. Even medium utilizers often come out ahead when factoring in premium and tax savings. The key is to compare your options and be open to shopping for care when it makes sense.
If you lose HSA eligibility, you don’t lose the money in your account—it’s still yours to use for qualified expenses, tax-free. You simply can’t make new contributions while you’re ineligible. If you become eligible again in the future, you can start contributing once more.
What happens to your HSA after you die depends on who you name as your beneficiary. If it’s your spouse, they can take over the account and continue using it tax-free for medical expenses. If it’s anyone else, the HSA will be cashed out, and the beneficiary will owe taxes on the balance.
Health insurance is one of the most valued employee benefits a company can offer, and providing it can help you attract and retain top talent. It demonstrates that you care about your employees’ well-being and helps reduce turnover. In addition, offering a group plan may provide tax benefits to both the employer and employees. For example, premiums paid by the employer are generally tax-deductible, and employees’ contributions can often be made pre-tax through a Section 125 cafeteria plan.
To qualify for a small group health insurance plan, your business usually needs at least one eligible employee who is not an owner or the owner’s spouse. The employee must work full-time or meet your state’s definition of eligibility. Some carriers may require wage documentation to confirm that the business is active and that employees are being paid. Even if you’re a small company, there are options available, and we can help you determine your eligibility.
If you’re applying for a small group fully-insured plan (typically 2–50 employees), coverage is guaranteed issue — that means you can’t be declined based on the group’s health history. These plans follow Affordable Care Act rules and don’t require medical underwriting.
However, some employers may qualify for level-funded plans, which can offer lower premiums for healthy groups. These plans do consider risk — carriers may ask for prior claims history or require employees to complete individual health questionnaires. Based on that information, the carrier can choose to offer coverage, adjust the rates, or decline the group altogether. We can help you evaluate both options and determine which makes the most sense.
Most insurance carriers define a full-time employee as someone who works at least 30 hours per week on a regular basis. This threshold is commonly used to determine eligibility for group health benefits. However, some carriers allow you to set a higher requirement (such as 35 hours) as long as it is applied consistently. It’s important to clearly define full-time status in your employee handbook or onboarding materials so there’s no confusion.
Group health insurance plans typically require the employer to contribute at least 50% of the premium for employee-only coverage. This ensures that employees have affordable access to the plan and helps meet carrier participation requirements. Employers can choose to contribute more than the minimum or offer a fixed dollar amount toward premiums. You’re not required to contribute toward dependent coverage, though you may choose to do so as an added benefit.
Most insurance companies require a certain percentage of eligible employees to enroll in the plan — often around 70% to 75%. Employees who have other valid coverage, such as through a spouse or Medicaid, are typically excluded from this calculation. This requirement ensures that the risk is spread across a broad group, which helps keep premiums affordable. Some carriers may waive participation requirements at certain times of year, like during the annual open enrollment window.
Yes, employers can create separate benefit classes based on legitimate job-related categories, such as full-time vs. part-time, management vs. staff, or by location. Each class can have its own plan offerings or employer contribution strategy. However, it’s important to ensure that the classifications are applied fairly and don’t discriminate against certain employees. Our team can help you structure your benefits in a way that meets your goals while complying with legal and carrier guidelines.
Most group health plans are offered on a 12-month contract, and your rates are guaranteed for that period. However, employers are not permanently locked in — if you decide to cancel the plan, most carriers allow you to terminate coverage with 30 days’ written notice. Keep in mind that early cancellation could impact employee satisfaction or create gaps in coverage, so it’s important to have a plan in place if you’re making changes mid-year.
Yes, once you enroll in a group health plan, your rates are typically guaranteed for 12 months. That means the premiums won’t change during your plan year, even if employees have significant medical expenses. Rates can change at renewal based on a variety of factors including group size, age distribution, plan design, and any changes in federal or state regulations. We’ll help you review your renewal and explore options if rates go up.
Most carriers allow group coverage to begin on the first day of any month, as long as your application is submitted before the cutoff date (usually 5–10 days before the desired start). Starting coverage mid-month is typically not allowed. We can help you time your enrollment to align with your payroll schedule and avoid coverage gaps, especially if you’re switching from another plan or offering benefits for the first time.
Many employers choose to enhance their benefits package by offering dental, vision, life insurance, disability coverage, and supplemental options like accident or critical illness insurance. These additional benefits are often surprisingly affordable and can be paid entirely by the employee, the employer, or a combination of both. Offering a broad range of benefits can improve morale, support employee wellness, and make your business more competitive in the job market.
Employers offering health benefits must comply with a range of requirements, including distributing required notices (like the Summary of Benefits and Coverage), properly handling pre-tax deductions under Section 125 rules, and following federal nondiscrimination laws. Depending on the size of your company, you may also need to provide COBRA or state continuation coverage and file IRS forms like the 1095-C. We’ll help you stay up to date with all applicable rules and take the burden off your plate.
No — there’s no added cost to use a licensed health insurance agent. Carrier rates include commissions whether you use an agent or go direct, so you’re paying for that service either way. By working with an agent, you gain access to expert guidance, personalized plan recommendations, support with enrollment and renewals, and help resolving any issues that may come up. It’s like having a benefits consultant on your team — at no extra charge.
Getting started is easy. We’ll help you gather the necessary information (like employee census and business documentation), walk you through your plan options, and recommend a setup that fits your team and your budget. From there, we handle the paperwork, assist with employee communication, and get your group enrolled on your desired start date.
Most individual and family plans available through the ACA Marketplace are HMO-style plans. This means you’ll typically need to use in-network doctors and hospitals, and get a referral to see a specialist. PPOs, which offer more flexibility, are rarely available in the individual market. All ACA-compliant plans are required to cover essential health benefits, including preventive care, prescription drugs, emergency services, mental health, maternity, and more — but networks and plan details vary by carrier.
Yes! If you don’t have access to affordable employer coverage, you may qualify for a premium tax credit to reduce your monthly premium — and possibly cost-sharing reductions to lower deductibles and copays. These subsidies are based on your household size and estimated income for the year. Most people qualify for some form of assistance, and we can help you estimate your eligibility and apply through Healthcare.gov or your state’s Marketplace.
No. Plans sold through the ACA Marketplace are guaranteed issue, which means you cannot be denied coverage or charged more due to a pre-existing condition. There are no medical exams or health questionnaires required. You simply select the plan that works best for you — and your coverage begins as early as the first of the following month.
That depends on the insurance carrier’s provider network. Because most plans in the individual market are HMOs, they require you to see in-network providers for care to be covered (except in emergencies). Before enrolling, we’ll help you check whether your preferred doctors, hospitals, and specialists participate in the plan’s network so there are no surprises.
The Open Enrollment Period runs from November 1 through December 15 for a January 1 start date. During this time, anyone can sign up or switch plans. If you miss it, you may still be eligible for a Special Enrollment Period triggered by events like losing job-based coverage, moving to a new state, getting married, having a baby, or other qualifying life events. If you don’t qualify for a special enrollment window, you may need to consider a short-term plan until the next Open Enrollment Period.
To apply for Marketplace coverage and financial assistance, you’ll need basic information like names, birthdates, and Social Security numbers for everyone applying. You should also estimate your household income for the year — typically based on your adjusted gross income plus certain tax-exempt amounts. If you’re not a U.S. citizen, you may need to provide immigration documents. Having your most recent tax return or pay stubs nearby can make the process easier.
If you’re in between jobs or waiting for other coverage to begin, a short-term health plan may be a temporary option. These plans are not ACA-compliant and usually don’t cover pre-existing conditions, maternity, or mental health care — but they can help protect you in case of major illness or injury. Short-term plans are not guaranteed issue and may involve basic medical questions. They’re best used as a short-term solution when you don’t qualify for an ACA plan.
Dental and vision plans are not included in most health insurance plans for adults but can be purchased separately. Pediatric dental is sometimes included in ACA plans, but adult coverage must be added as a standalone plan. We can help you compare affordable options for dental and vision coverage that match your needs and budget.
No — there’s no additional cost to work with a licensed agent. Health insurance premiums are the same whether you enroll directly or with help. The advantage of working with an agent is getting personal guidance, access to plan comparisons, and ongoing support throughout the year — including help resolving billing or coverage issues, and guidance during future renewals or life changes.