Medicare registration delay. What do you know

Dear Liz: When my husband approached 65, he was employed and covered in a deductible, highly deductible health plan (HDHP) using a health savings account with his employer. Neither his employer nor his local Social Security Administration offered specific advice on how to proceed with Medicare registration, but after a tremendous study he ultimately delayed his registration. Now I’m approaching 65. My husband is still working and I’m still covered by his health insurance, but both are his names. Do you register with Medicare at the right time, or do you delay registration like he does?

answer: Delaying Medicare enrollment can result in penalties that can increase your life’s premiums. However, if you or your spouse is still working for an employer with more than 20 employees, you can usually choose to maintain the health insurance provided by your employer and delay your Medicare application without being punished. If you lose compensation or employment termination, it will take you eight months to sign up before receiving the fine.

Also, delaying Medicare enrollment will help your husband continue to contribute to his health savings account on your behalf. The 2025 HSA contribution limit is $4,300 for personal coverage and $8,550 for family coverage plus $1,000 for account holders over 55 years of age. Registering with Medicare will no longer allow HSA contributions.

Medicare itself suggests that it can reach out to the employer’s benefits department to ensure that it is covered properly and delay applications. Hope your employer’s HR department is on track on this important topic.

Dear Liz: Read a recent column on capital gains and home sales. Our understanding is that if you sell an equal or greater value property within a 180-day window before purchasing, the tax basis is the purchase price plus a $500,000 exemption plus a depreciation of that number, whatever the number is, minus the above profits or are subject to capital. We spoke to the CPA about this and he introduced us to a site specializing in 1031 exchanges.

answer: Mashed two different sets of tax laws.

Only major home sales qualify for a home sales exemption. This would exempt the profits of home sales as much as $500,000 from taxation for married couples. You must have owned at least two of the past five years and lived in the house.

Meanwhile, 1031 exchanges can postpone capital gains for investment properties such as commercial and rental properties as long as they purchase similar properties within 180 days (and follow a bundle of other rules). Replacement properties don’t have to be more expensive, but if they are cheaper than the properties you sell or have fewer mortgages, you may be subject to capital gains tax on the differences.