Instructions For Form 8889 - Health Savings Accounts - 2006


Department of the Treasury
Internal Revenue Service
Instructions for Form 8889
Health Savings Accounts (HSAs)
Section references are to the Internal
Revenue Code unless otherwise noted.
coverage coverage
Generally, an HSA is a health savings
account set up exclusively for paying
General Instructions
Minimum annual
the qualified medical expenses of the
account beneficiary or the account
Purpose of Form
beneficiary’s spouse or dependents.
Maximum annual
Use Form 8889 to:
Distributions From an HSA
$5,250 $10,500
Report health savings account
Distributions from an HSA used
* This limit does not apply to deductibles and
(HSA) contributions (including those
exclusively to pay qualified medical
expenses for out-of-network services if the plan
made on your behalf and employer
expenses of the account beneficiary,
uses a network of providers. Instead, only
deductibles and out-of-pocket expenses (such as
spouse, or dependents are
copayments and other amounts, but not
Figure your HSA deduction, and
excludable from gross income. (See
premiums) for services within the network should
Report distributions from HSAs.
the line 13 instructions for information
be used to figure whether the limit is reached.
on medical expenses of dependents
Additional information. See Pub.
not claimed on your return.) You can
An HDHP can provide preventive
969, Health Savings Accounts and
receive distributions from an HSA
care and certain other benefits with
Other Tax-Favored Health Plans, for
even if you are not currently eligible
no deductible or a deductible below
more details on HSAs.
to have contributions made to the
the minimum annual deductible. For
HSA. However, any part of a
more details, see Pub. 969. An HDHP
Who Must File
distribution not used to pay qualified
does not include a plan if
You must file Form 8889 if any of the
medical expenses is includible in
substantially all of the coverage is for
following applies.
gross income and is subject to an
accidents, disability, dental care,
You (or someone on your behalf,
additional 10% tax unless an
vision care, or long-term care. An
including your employer) made
exception applies.
HDHP also cannot be insurance that
contributions for 2006 to your HSA.
you are permitted to have in addition
Qualified Medical Expenses
You received HSA distributions in
to an HDHP. See Other Health
Coverage next.
Generally, qualified medical
You acquired an interest in an HSA
expenses for HSA purposes are
Other Health Coverage
because of the death of the account
unreimbursed medical expenses that
beneficiary. See Death of Account
If you have an HSA, you (and your
could otherwise be deducted on
Beneficiary on page 2.
Schedule A (Form 1040). See the
spouse, if you have family coverage)
generally cannot have any health
Instructions for Schedule A and Pub.
coverage other than an HDHP. But
502, Medical and Dental Expenses
(Including the Health Coverage Tax
your spouse can have health
coverage other than an HDHP if you
Credit). However, you cannot treat
are not covered by that plan. If you
insurance premiums as qualified
Eligible Individual
medical expenses unless the
have a health flexible spending
To be eligible to have contributions
arrangement or health reimbursement
premiums are for:
made to your HSA, you must be
arrangement, see Pub. 969.
covered under a high deductible
Long-term care (LTC) insurance,
health plan (HDHP) and have no
Exceptions. You can have additional
Health care continuation coverage
other health coverage except
insurance that provides benefits only
(such as coverage under COBRA),
permitted coverage. If you are an
Health care coverage while
eligible individual, anyone can
Liabilities under workers’
receiving unemployment
contribute to your HSA. However, you
compensation laws, tort liabilities, or
compensation under federal or state
cannot be enrolled in Medicare or be
liabilities arising from the ownership
law, or
claimed as a dependent on another
or use of property,
Medicare and other health care
person’s tax return. You must be an
A specific disease or illness, or
coverage if you were 65 or older
eligible individual on the first day of a
A fixed amount per day (or other
(other than premiums for a Medicare
month to take an HSA deduction for
period) of hospitalization.
supplemental policy, such as
that month.
You can also have coverage
Account Beneficiary
(either through insurance or
High Deductible Health Plan
The account beneficiary is the
otherwise) for accidents, disability,
individual on whose behalf the HSA
An HDHP is a health plan that meets
dental care, vision care, or long-term
was established.
the following requirements.
Cat. No. 37971Y


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