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

health coverage that is not an HDHP. However, you can

Form 8853, Archer MSAs and Long-Term Care Insurance

still be an eligible individual even if your spouse has

Contracts.

non-HDHP coverage provided you are not covered by that

Example 1. You have an HDHP for your family all year

plan. However, you can have additional insurance that

in 2011. The annual deductible is $5,000. You can contrib-

provides benefits only for the following items.

ute up to $3,750 ($5,000 × 75%) to your Archer MSA for

•

Liabilities incurred under workers’ compensation

the year.

laws, torts, or ownership or use of property.

•

Example 2. You have an HDHP for your family for the

A specific disease or illness.

entire months of July through December 2011 (6 months).

•

A fixed amount per day (or other period) of hospitali-

The annual deductible is $5,000. You can contribute up to

zation.

$1,875 ($5,000 × 75% ÷ 12 × 6) to your Archer MSA for the

year.

You can also have coverage (whether provided through

insurance or otherwise) for the following items.

If you and your spouse each have a family plan,

you are treated as having family coverage with

•

TIP

Accidents.

the lower annual deductible of the two health

•

Disability.

plans. The contribution limit is split equally between you

unless you agree on a different division.

•

Dental care.

•

Income limit. You cannot contribute more than you

Vision care.

earned for the year from the employer through whom you

•

Long-term care.

have your HDHP.

If you are self-employed, you cannot contribute more

than your net self-employment income. This is your income

Contributions to an MSA

from self-employment minus expenses (including the de-

ductible part of self-employment tax).

Contributions to an Archer MSA must be made in cash.

You cannot contribute stock or other property to an Archer

Example 1. Noah Paul earned $25,000 from ABC Com-

MSA.

pany in 2011. Through ABC, he had an HDHP for his family

for the entire year. The annual deductible was $5,000. He

can contribute up to $3,750 to his Archer MSA (75% ×

Who can contribute to my Archer MSA? If you are an

$5,000). He can contribute the full amount because he

employee, your employer may make contributions to your

earned more than $3,750 at ABC.

Archer MSA. (You do not pay tax on these contributions.) If

your employer does not make contributions to your Archer

Example 2. Westley Lawrence is self-employed. He

MSA, or you are self-employed, you can make your own

had an HDHP for his family for the entire year in 2011. The

contributions to your Archer MSA. Both you and your

annual deductible was $5,000. Based on the annual de-

employer cannot make contributions to your Archer MSA in

ductible, the maximum contribution to his Archer MSA

the same year. You do not have to make contributions to

would have been $3,750 (75% × $5,000). However, after

your Archer MSA every year.

deducting his business expenses, Joe’s net

If your spouse is covered by your HDHP and an

self-employment income is $2,500 for the year. Therefore,

excludable amount is contributed by your

he is limited to a contribution of $2,500.

spouse’s employer to an Archer MSA belonging

CAUTION

Individuals enrolled in Medicare. Beginning with the

to your spouse, you cannot make contributions to your own

first month you are enrolled in Medicare, you cannot con-

Archer MSA that year.

tribute to an Archer MSA. However, you may be eligible for

a Medicare Advantage MSA, discussed later.

Limits

When To Contribute

There are two limits on the amount you or your employer

can contribute to your Archer MSA:

You can make contributions to your Archer MSA for 2011

•

until April 17, 2012.

The annual deductible limit.

•

An income limit.

Reporting Contributions on Your Return

Annual deductible limit. You (or your employer) can

Report all contributions to your Archer MSA on Form 8853

contribute up to 75% of the annual deductible of your

and file it with your Form 1040 or Form 1040NR. You

HDHP (65% if you have a self-only plan) to your Archer

should include all contributions you, or your employer,

MSA. You must have the HDHP all year to contribute the

made for 2011, including those made by April 17, 2012,

full amount. If you do not qualify to contribute the full

that are designated for 2011.

amount for the year, determine your annual deductible limit

You should receive Form 5498-SA, HSA, Archer MSA,

by using the worksheet for line 5 in the Instructions for

or Medicare Advantage MSA Information, from the trustee

Page 12

Publication 969 (2011)

Publication 969 - Health Savings Accounts And Other Tax-Favored Health Plans - 2011 Page 12

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