Publication 969 - Health Savings Accounts And Other Tax-Favored Health Plans

•

The contributions remain in your account from year

2. Routine prenatal and well-child care.

to year until you use them.

3. Child and adult immunizations.

•

The interest or other earnings on the assets in the

4. Tobacco cessation programs.

account are tax free.

5. Obesity weight-loss programs.

•

Distributions may be tax free if you pay qualified

medical expenses. See

Qualified medical expenses,

6. Screening services. This includes screening services

later.

for the following:

•

An HSA is “portable” so it stays with you if you

a. Cancer.

change employers or leave the work force.

b. Heart and vascular diseases.

c. Infectious diseases.

Qualifying for an HSA

d. Mental health conditions.

To be an eligible individual and qualify for an HSA, you

e. Substance abuse.

must meet the following requirements.

f. Metabolic, nutritional, and endocrine conditions.

•

You must be covered under a high deductible health

g. Musculoskeletal disorders.

plan (HDHP), described later, on the first day of the

month.

h. Obstetric and gynecological conditions.

•

You have no other health coverage except what is

i. Pediatric conditions.

permitted under

Other health

coverage, later.

j. Vision and hearing disorders.

•

You are not enrolled in Medicare.

For more information on screening services, see No-

•

You cannot be claimed as a dependent on someone

tice 2004-23, 2004-15 I.R.B. 725 available at

else’s 2010 tax return.

gov/irb/2004-15_IRB/ar10.html.

Under the last-month rule, you are considered to

The following table shows the minimum annual deducti-

be an eligible individual for the entire year if you

TIP

ble and maximum annual deductible and other

are an eligible individual on the first day of the last

out-of-pocket expenses for HDHPs for 2010.

month of your tax year (December 1 for most taxpayers).

If you meet these requirements, you are an eligible

Self-only coverage

Family coverage

individual even if your spouse has non-HDHP family cover-

Minimum annual

age, provided your spouse’s coverage does not cover you.

deductible

$1,200

$2,400

If another taxpayer is entitled to claim an exemp-

Maximum annual

deductible and

tion for you, you cannot claim a deduction for an

other out-of-pocket

HSA contribution. This is true even if the other

CAUTION

expenses*

$5,950

$11,900

person does not actually claim your exemption.

* This limit does not apply to deductibles and expenses for out-of-network

Each spouse who is an eligible individual who

services if the plan uses a network of providers. Instead, only deductibles

wants an HSA must open a separate HSA. You

TIP

and out-of-pocket expenses for services within the network should be used

to figure whether the limit applies.

cannot have a joint HSA.

The following table shows the minimum annual

deductible and maximum annual deductible and

TIP

High deductible health plan (HDHP). An HDHP has:

other out-of-pocket expenses for HDHPs for

•

A higher annual deductible than typical health plans,

2011.

and

•

A maximum limit on the sum of the annual deducti-

Self-only coverage

Family coverage

ble and out-of-pocket medical expenses that you

Minimum annual

must pay for covered expenses. Out-of-pocket ex-

deductible

$1,200

$2,400

penses include copayments and other amounts, but

Maximum annual

do not include premiums.

deductible and

other out-of-pocket

An HDHP may provide preventive care benefits without

expenses*

$5,950

$11,900

a deductible or with a deductible below the minimum an-

nual deductible. Preventive care includes, but is not limited

* This limit does not apply to deductibles and expenses for out-of-network

services if the plan uses a network of providers. Instead, only deductibles

to, the following.

and out-of-pocket expenses for services within the network should be used

to figure whether the limit applies.

1. Periodic health evaluations, including tests and diag-

Self-only HDHP coverage is an HDHP covering only an

nostic procedures ordered in connection with routine

examinations, such as annual physicals.

eligible individual. Family HDHP coverage is an HDHP

Publication 969 (2010)

Page 3

Publication 969 - Health Savings Accounts And Other Tax-Favored Health Plans - 2010 Page 3

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