Fulton County council adopts HSA policy for employees who waive Medicare; retroactive payments tabled

Fulton County Council voted Sept. 16 to allow employees who decline Medicare entitlement to continue receiving county Health Savings Account (HSA) contributions so long as they sign a written affidavit waiving Medicare and remain covered by the county group health plan.

Council members approved the change on a 6–0 vote and directed staff to require a signed waiver filed with the auditor’s office as the condition for continuing HSA contributions for employees who opt out of Medicare moving forward.

The decision followed extended public comment from current and former county employees who said they were told in the past they had to enroll in Medicare at age 65 and that, as a result, they lost county HSA contributions. Several employees urged the council to provide retroactive payments for those who were given incorrect advice.

County staff and counsel told the council that federal rules prevent an employer from providing a tax‑favored HSA contribution to someone who is enrolled in Medicare. Staff said the county cannot retroactively ‘‘undo’’ someone’s Medicare enrollment to make a contribution tax‑free. If the council chooses to make affected employees whole, staff said such payments would be taxable to employees and could create additional payroll‑tax and ERISA considerations.

Presenter Darren Longenecker and county staff recommended two actions: (1) adopt a forward‑looking policy that employees who affirmatively waive Medicare and file an affidavit at the auditor’s office may continue to receive the county HSA contribution; (2) research how many employees might be eligible for retroactive payments and return to council with cost estimates and recommended processes.

Council passed the forward policy 6–0 (mover Pete; second Patty). On the question of retroactive payments, council members voted to table that issue pending staff research on how many employees were affected and what the cost and tax consequences would be (motion to table carried 6–0; mover Patty; second Chase).

Clarifying points mentioned during the discussion: - Staff said Medicare Part A automatic enrollment (for those receiving Social Security) may complicate undoing entitlement and that the practical ability to reverse Medicare enrollment is limited. - Staff said the county’s prescription coverage is currently deemed credible for Medicare Part D, and that employees who waive Medicare while covered by the group plan should be able to avoid Part D penalties when they later enroll. - The presenter cited the 2025 individual HSA annual contribution cap ($4,350) as a limit to how much could be credited in a single year; staff warned that lumping retroactive amounts into a single year could create tax or maximum‑contribution problems.

Council instructed staff to compile a list of potentially affected employees and return with recommendations, cost estimates and legal/tax analysis. Council also directed that going forward employees who waive Medicare must sign an affidavit in the auditor’s office to document the election.