I believe that congress passed leg. at the very end of last year or the beg. of this year that allows persons to increase the contributions to their HSA accounts (one time?) to an increased maximum from a qualified plan such as IRA or other. It also is law that health care providers must be able to accomodate for such rollovers / transfer of funds within 6mos. of said legislation.

 Where is Lumenos with this and when can we expect that our employers willl be rolling out the announcement of this opportunity? OR will Lumenos provide such announcements? This is my first year with the Lumenos plan and I am getting nailed-I won't have any funds to rollover and may likely meet my out of pocket maximum so this is critical stuff for me. $5700 out of pocket is really gonna hurt however, if I can at least absorb 3K-$3500 of it with already saved-pre-tax dollars that would really help.

Anyone have any news or insight on this can of worms (for provider)? Or a contact to who might know anything and when?

melonman 

Personally, I switched from the Wellpoint HSA plan to the Lumenos HRA plan on 1/1/07. We had our 2nd baby on Feb 26, so our medical bills put me straight into my high-deductible plan (tradional health coverage). I had some money left over in my HSA, and used that to pay the diff between my HRA deductible and my employers contribution, so I got lucky in that regard. It then occurred to me that I could contribute more cash to my HSA, up to the max for families (this year it's $5450). This extra contribution to my HSA saved me over $600 on my taxes, which I filed just a few days ago, so the tax advantage is really nice. It surprised me and I've been in this business for 6 years...

I'm not sure of the rules for IRA rollover, so I'll track this question down with our HSA business team...

 - rudi

In December 2006, Congress did indeed pass and the President signed into law new rules regarding Health Savings Accounts (HSA). The new law is referred to as the ‘‘Health Opportunity Patient Empowerment Act of 2006’’ and it enacted several key changes to existing HSA rules under the Internal Revenue Code. Most of the changes are effective as of 1/1/2007. One of the rule changes allows consumers to initiate a "one-time" transfer of money from an IRA to an HSA, however there are considerations you may want to keep in mind if you are considering initiating this transfer.

The rules require that the custodian/administrator of your IRA initiate the transfer (referred to as a trustee-to-trustee transfer) resulting in a transfer from the IRA custodian directly to the custodian of the HSA. This likely will require you to complete a form with the IRA administrator which may require your HSA account number to complete the transfer. You'll want to contact the IRA administrator regarding details and availability.

Amounts transferred from an IRA to the HSA count toward one's annual HSA contribution maximum - so for example if you are HSA-eligible in 2007 and enrolled in  HSA-qualified family coverage for the full year, the annual HSA contribution amount for family is now $5650 for 2007. If you are eligible for the IRA transfer and elect to move funds from your IRA - say $1000 - this means your HSA annual limit from any other source would be $4650. If you have single coverage, the numbers would be different. The most you would be able to transfer tax free as a one-time rollover from your IRA to an HSA is the HSA annual contribution amount associated with your qualified HSA coverage.

Lastly, you will want to keep in mind that there is a testing period - the IRS requires that you remain HSA eligible for 12 months following the IRA rollover. If you fail to remain eligible for an HSA, the amount you transferred from the IRA would be subject to taxes and a 10% penalty. You should talk to a tax advisor or refer to the IRS web site for additional details and conditions regarding your specific circumstances.