In November 2023 I applied for Medicare Part A (the same month I turned 65)
A few months prior to November 2023 I instructed my employer to stop the payroll deductions to my HSA account. Payroll promptly accommodated my request.
I was laid off the last day of October 2023.
The layoff severance package included a lump sum to be provided in 2024.
I just noticed the 2024 lump sum included a note that the company made a $1,100 contribution to my HSA (not from my payroll - more like a “going away present” from the employer.)
Given that I don’t want to run afoul of Medicare/IRS/whoever, I want to have the $ rescinded from my HSA account.
I spoke with my former employer’s payroll department; they said they couldn’t help and then referred me to the bank that manages my HSA.
I spoke with the bank that manages my HSA; they said I could complete an “Excess Contribution and Deposit Correction Form”. However, it appears the $ would not go back to the employer; instead, the bank that manages my HSA would simply send me a check, which seems wrong.
1. How can I fix this (return the funds and have the UNEXPECTED 2024 HSA contribution removed from my records)?
If I can’t fix this, what is the penalty?
Is it a single fine / am I to be penalized by having my Medicare premiums increased / or is it some other type of long-term penalty?