41.10 Health Savings Account (HSA) Basics
Health savings accounts (HSAs) can be used by individuals covered by a high-deductible health plan (HDHP) to save for health-care costs on a tax-free basis in an IRA-like account. HSAs are intended to supplant Archer MSAs; see the discussion of Archer MSA rules later in this Chapter (41.13).
The HSA provides a tax-sheltered account for paying routine medical expenses that fall below the deductible set by the HDHP. To contribute to an HSA, you must not be enrolled in Medicare Part A or Part B and you must not be a dependent of another taxpayer.
Planning Reminder
A qualifying HDHP must have a minimum annual deductible and a maximum annual limit on out-of-pocket costs (see below). For 2012, the minimum annual HDHP deductible is $1,200 for self-only coverage and $2,400 for family coverage. The limit on out-of-pocket costs for 2012 is $6,050 for self-only coverage and $12,100 for family coverage. The limit applies to co-payments, deductibles, and other payments but not premiums.
Generally, contributions to an HSA are not allowed if the taxpayer has coverage under ...
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