Can You Roll IRA Money Into an HSA?

Tax-free IRA money can be used to pay health expenses.

Money in your individual retirement account can be used to fund a health savings account (HSA), but the use of IRA funds is always subject to rules and restrictions which can change from year to year.

One-Time Transfer

In most cases you can transfer IRA funds to an HSA account only once.

High-Deductible Accounts Only

HSA money can only be used with a high-deductible health plan (HDHP). Check with your insurance provider to make sure your policy qualifies.

Remain Eligible for 12 Months

You must remain eligible for a HDHP for 12 months after the IRA transfer.

Maximum Contribution Amount

Your maximum HSA contribution is determined by several factors. Check with your account provider or other qualified professional to determine the maximum HSA contribution you can make in the current year.

Potential Tax Penalty

The penalty for an improper use of IRA funds is 10 percent of the amount withdrawn from the IRA for the improper use.

References

• IRS and Treasury Notice 2008-51: IRA to HSA Transfers