When you enroll in Medicare, you can still have a health savings account to pay for eligible medical expenses; however, you're no longer eligible to make or receive contributions. If your spouse is still working and enrolled in a high-deductive health plan through their employer, they can continue contributing to an HSA account up to the IRS annual limits.

If you're working beyond age 65, you must stop all HSA contributions (employee + employer) six months before you plan on enrolling in Medicare or face tax penalties. The reason for this is you can't contribute to an HSA when covered by Medicare, and Medicare gives you retroactive coverage for premium-free Part A back six months from when you enroll. 

The employee must contact the PEHP FLEX Department at (801) 366-7503 to inform them that they are getting ready to retire and must stop the employer contributions and their own contributions to the HSA account. 

The penalty is heavy, and it is a lifetime penalty. There is no way to avoid it if they do not stop the contributions.