Buck Bond Group

HSA Account Transfers or Rollovers

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Note for Employers: Health Savings Accounts (HSAs) are becoming a more common part of average Americans’ lives. Paired with HSA-qualified health plans, they cover a growing number of Americans’ health care costs and play an important role in their future.

This post is one of several that will appear in the coming months to help your employees understand HSAs better and use them strategically. The posts are excerpts from “HSA Owner’s Manual, Second Edition” by Todd Berkley (published by Tate Publishing, 2015). Todd Berkley is Senior Vice President and Managing Director for BenefitWallet®, A Xerox Solution.


You can make an unlimited number of trustee-to-trustee transfers from one HSA that you own to another HSA that you own. A trustee-to-trustee transfer is the direct movement of your HSA money between HSA accounts and may serve to minimize mistakes and potential penalties because you never take possession of the money.  Be sure to contact the bank that you want to transfer from since they will often have stricter transfer requirements than the bank receiving the money.

"Even if you are a saver, with no intention of reimbursing expenses prior to retirement, be sure to save receipts for all eligible expenses you did not reimburse." Todd Berkley, Senior Vice president and Managing Direector, BenefitWallet.

“Proceed with caution: An IRA transfer counts against your annual contribution limit.” Todd Berkley, Senior Vice president and Managing Direector, BenefitWallet.

You can execute one rollover per year. Under a rollover arrangement, you take possession of the funds before depositing them in to your new HSA. You must place the funds in to the new HSA within 60 days, or your entire rollover is considered a withdrawal and subject to ordinary income tax as well as a 20% penalty.

You can move balances from an Archer Medical Savings Account (MSA) to an HSA. Archer MSAs are the forerunner of HSAs.  Due to differences between the two, MSA accountholders may be better served by moving MSA balances into an HSA. You can make unlimited trustee-to-trustee transfers or one rollover annually.

You cannot move unused Health FSA or HRA funds into an HSA.

You can make a one-time transfer from a traditional Individual Retirement Arrangement (IRA) or Roth IRA to an HSA, subject to these rules:

  • You have a lifetime limit of only one transfer or rollover.
  • Transferred amount counts against your annual HSA contribution limit in that tax year.
  • You must stay HSA-eligible for 12 full months following the month of transfer, known as the “testing period”. If you fail to stay eligible during the testing period, you must include the entire transfer in your taxable income and pay a 20% additional penalty.
  • If you have money in two or more IRAs that you wish to transfer to an HSA, you must first do an IRA-to-IRA transfer or rollover to move the money into one transferable IRA account.

You can’t make transfers from any other type of retirement account, e.g., your 401(k) account.