Instructions For Form 8889 - Health Savings Accounts

High Deductible Health Plan

Death of Account Beneficiary

assets in the account as of January 1,

2011, on line 14a.

An HDHP is a health plan that meets

If the account beneficiary’s surviving

•

You used any portion of any of your

the following requirements.

spouse is the designated beneficiary,

HSAs as security for a loan at any time

the HSA is treated as if the surviving

in 2011. You must include the fair

spouse were the account beneficiary.

Self-only

Family

market value of the assets used as

The surviving spouse completes Form

coverage coverage

security for the loan as income on line

8889 as though the HSA belonged to

21 of Form 1040 or Form 1040NR.

him or her.

Minimum annual

deductible

$1,200

$2,400

If the designated beneficiary is not

Any deemed distribution will not be

Maximum annual

the account beneficiary’s surviving

treated as used to pay qualified medical

out-of-pocket

spouse, or there is no designated

expenses. Generally, these

expenses*

$5,950 $11,900

beneficiary, the account ceases to be

distributions are subject to the

an HSA as of the date of death. The

additional 20% tax.

beneficiary completes Form 8889 as

* This limit does not apply to deductibles and

expenses for out-of-network services if the plan

follows.

Rollovers

uses a network of providers. Instead, only

•

Enter “Death of HSA account

deductibles and out-of-pocket expenses (such as

A rollover is a tax-free distribution

beneficiary” across the top of Form

copayments and other amounts, but not

(withdrawal) of assets from one HSA or

8889.

premiums) for services within the network should

Archer MSA that is reinvested in

•

be used to figure whether the limit is reached.

Enter the name(s) shown on your tax

another HSA. Generally, you must

return and your SSN in the spaces

complete the rollover within 60 days

An HDHP can provide preventive

provided at the top of the form and skip

after you received the distribution. An

care and certain other benefits with no

Part I.

HSA can only receive one rollover

deductible or a deductible below the

•

On line 14a, enter the fair market

contribution during a 1-year period. See

minimum annual deductible. For more

value of the HSA as of the date of

Pub. 590, Individual Retirement

details, see Pub. 969. An HDHP does

death.

Arrangements (IRAs), for more details

not include a plan if substantially all of

•

On line 15, for a beneficiary other

the coverage is for accidents, disability,

and additional requirements regarding

than the estate, enter qualified medical

dental care, vision care, or long-term

rollovers.

expenses incurred by the account

care. An HDHP also cannot be

beneficiary before the date of death

Note. If you instruct the trustee of your

insurance that you are permitted to

that you paid within 1 year after the

HSA to transfer funds directly to the

have in addition to an HDHP. See

date of death.

trustee of another HSA, the transfer is

Other Health Coverage next.

•

Complete the rest of Part II.

not considered a rollover. There is no

Other Health Coverage

limit on the number of these transfers.

If the account beneficiary’s estate is

Do not include the amount transferred

If you have an HSA, you (and your

the beneficiary, the value of the HSA as

spouse, if you have family coverage)

in income, deduct it as a contribution,

of the date of death is included on the

generally cannot have any health

or include it as a distribution on line

account beneficiary’s final income tax

coverage other than an HDHP. But

14a.

return. Complete Form 8889 as

your spouse can have health coverage

described above, except you should

other than an HDHP if you are not

Qualified HSA distribution. This is a

complete Part I, if applicable.

covered by that plan. If you have a

distribution from a health flexible

health flexible spending arrangement or

spending arrangement (FSA) or health

The distribution is not subject to the

health reimbursement arrangement,

reimbursement arrangement (HRA) that

additional 20% tax. Report any

see Pub. 969.

is contributed by your employer directly

earnings on the account after the date

to your HSA. This is a one-time

of death as income on your tax return.

Exceptions. You can have additional

distribution from any of these

insurance that provides benefits only

Note. If, during the tax year, you are

arrangements. The distribution is

for:

the beneficiary of two or more HSAs or

•

treated as a rollover contribution to the

Liabilities under workers’

you are a beneficiary of an HSA and

HSA and is subject to the testing period

compensation laws, tort liabilities, or

you have your own HSA, you must

rules shown below. See Pub. 969 for

liabilities arising from the ownership or

complete a separate Form 8889 for

more information.

use of property;

each HSA. Enter “statement” at the top

•

A specific disease or illness; or

of each Form 8889 and complete the

Testing period. You must remain

•

A fixed amount per day (or other

form as instructed. Next, complete a

an eligible individual during the testing

period) of hospitalization.

controlling Form 8889, combining the

period. The testing period begins with

amounts shown on each of the

You can also have coverage (either

the month in which the qualified HSA

statement Forms 8889. Attach the

through insurance or otherwise) for

distribution is contributed to the HSA

statements to your tax return after the

accidents, disability, dental care, vision

and ends on the last day of the 12th

controlling Form 8889.

care, or long-term care.

month following that month. For

example, if the distribution is

For information on prescription drug

Deemed Distributions From

contributed on June 14, 2011, the

plans, see Pub. 969.

HSAs

testing period ends on June 30, 2012. If

Disabled

The following situations result in

you fail to remain an eligible individual

deemed distributions from your HSA.

during this period, other than because

An individual generally is considered

•

of death or becoming disabled, you will

disabled if he or she is unable to

You engaged in any transaction

have to include the qualified HSA

engage in any substantial gainful

prohibited by section 4975 with respect

distribution in income in the year in

activity due to a physical or mental

to any of your HSAs, at any time in

which you fail to be an eligible

impairment which can be expected to

2011. Your account ceases to be an

individual. This amount is also subject

result in death or to continue

HSA as of January 1, 2011, and you

to a 10% additional tax. (See Part III.)

indefinitely.

must include the fair market value of all

-2-

Form 8889 (2011)

Instructions For Form 8889 - Health Savings Accounts - 2011 Page 2

Related Articles

Related forms

Related Categories