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  • Eric Hahn

HSA Rollovers and Transfers: Everything You Need to Know

Do you have multiple Health Savings Accounts (HSAs) or perhaps want to move a single HSA to a new provider?

Fortunately, HSA rollovers and transfers are common. Unfortunately, there is no industry standard for an HSA rollover or transfer. Most providers leave it up to you to determine how to handle it. This article will provide you with everything you need to know, but it is always smart to contact your tax professional or fiduciary advisor to help you navigate these waters.

Depending on who your HSA provider is and how your account is invested, you will have options.

· HSA Rollover (subject to one every 12 months)

· HSA Trustee-to-Trustee Transfer (no limit, not viewed by IRS as a “rollover”)

· In-Kind HSA Transfer (in some cases)

· IRA to HSA Transfer


The IRS allows an HSA holder to “rollover” their funds to a new HSA provider once every 12 months while maintaining the tax advantage. Here's how it works:

1. Contact your HSA provider and request a rollover.

2. The provider will then distribute your funds via check or transfer to a personal bank account.

3. You have 60 days upon receipt to re-deposit these funds into the new HSA. If not re-deposited within 60 days, the IRS will consider this a taxable distribution subject to ordinary income taxes plus a 20% penalty!

4. When done properly, these funds are not included in your taxable income and it does not reduce your contribution limit for the year.


A trustee-to-trustee transfer happens directly between the current HSA provider and the new HSA provider – the funds are never in your possession. As a result, a trustee-to-trustee transfer can happen as often as you'd like. In other words, the IRS 12-month rule does not apply to a trustee-to-trustee HSA transfer.

The transferred amount is not considered a distribution, so taxes and penalties would not apply. The transferred amount doesn’t count towards your annual contribution and is not included in your annual income.

Depending on how your account is invested it may not be eligible for a trustee-to-trustee transfer, so be sure to confirm with your current provider.


If your HSA assets are invested in securities such as mutual funds, ETFs, or stocks, then you may want to consider an in-kind HSA transfer. This type of HSA transfer will move your existing positions from the current HSA into the HSA with your new provider.

Unfortunately, not all HSA providers will support this type of transfer. If your provider does not allow for an in-kind transfer, then you will have to liquidate your securities before moving them. To make matters worse, there are a few states (e.g., CA) which consider any interest, dividends, and realized gains as taxable income (be sure ti check with a tax professional). It is worth contacting your provider directly to find out if an in-kind HSA transfer is available to you.


The IRS allows you to move assets from your Individual Retirement Account (IRA) to your HSA once in your lifetime. Yes, lifetime! This is great because it offers an extra tax advantage. Important to note: this transfer type will count towards your annual contribution limit, so you must do this transfer when you are eligible to contribute to your HSA. Additionally, the IRA-to-HSA includes a 12 month “testing period” which requires you to remain eligible for your HSA for 12 months following the transfer. If you don’t remain eligible, the amount you transferred may be considered taxable income.

The maximum amount you can transfer is the same as your annual contribution limit for that year.


· You can rollover funds from other retirement accounts, such as a 401(k) or 457 plan, by first rolling those funds into an IRA. Once the funds are in an IRA you can initiate your one-time IRA-to-HSA transfer. Again, be sure to consult with a professional on this type of move.

· You do not need to be eligible to contribute to an HSA in order to rollover or transfer your funds (except for the IRA-to-HSA transfer). These options are available to you if you have any HSA funds in your account.

· Ask about any fees! Most providers will charge you fees to transfer your money. Be sure you ask about this upfront so that you are aware.

· These transfers and rollovers can take anywhere between 2-6 weeks. Manage your expectations but don’t hesitate to contact your providers for status checks.


If you would like to learn more about Health Savings Accounts or other personal finance topics, you can email your inquiries at

Eric Hahn, IAR, is a Registered Investment Advisor Representative for NS Capital based in the Stamford, CT office. Eric provides investment advisory and portfolio management services for investors and savers.

Note: None of the above should be considered tax or investment advice. Please contact your tax or investment professional to determine the best course of action for your situation.

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