Health Savings Accounts
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Questions and Answers regarding Health Savings Account Funding Sources
| What sources other than annual contributions are available to fund a Health Savings Account? |
| If you have immediate health care needs, there may be insufficient funds in an HSA, especially in its initial phase, to pay for the health insurance policy deductible and/or any qualified medical expenses not covered by the health insurance policy. To compensate for this potential problem, there are several other sources from which you can roll over (transfer) funds into an HSA on a tax-free basis: |
| • | Funds may be rolled over to an HSA from an unused flexible spending account (FSA) or a health reimbursement account (HRA). |
| • | Funds may be rolled over to an HSA from an IRA. |
| What are the requirements to fund an HSA with funds from an FSA or HRA? |
| An employee has a one-time opportunity to roll over unused funds from an existing flexible spending account (FSA) and/or health reimbursement account (HRA) into an HSA. The transfer is tax-free and must be made prior to January 1, 2012. The maximum transfer amount is the lesser of the balance in the FSA or HRA as of the date of transfer or September 21, 2006. |
What are the requirements to fund an HSA with funds from an IRA? |
| A one-time tax-free transfer of funds from an IRA to an HSA may be made. The amount rolled over cannot exceed the annual HSA statutory maximum contribution for the year ($2,900 for individual coverage or $5,800 for family coverage in 2008; $3,000 for individual coverage or $5,950 for family coverage in 2009). The transfer of funds from an IRA to an HSA can be done only once during your lifetime and, once rolled over to the HSA, the funds cannot be transferred back to the IRA. |
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