403(b) to Health Savings Account
I am looking into an HSA. I read that you can transfer an IRA into an HSA on a
one-time basis. Would that also apply if you had a 403(b) is a public School
(PA.) retirement plan?
A: This tax-free provision of tax law only applies to regular Individual Retirement Accounts (IRA). To achieve the tax-free transfer to a Health Savings Account (HSA), you must do this as a two-step transaction. Step 1- rollover the 403(b) to an IRA, Step 2- transfer the IRA to your HSA. Your IRA administrator and/or HSA administrator (depending on which companies you use) will handle this two step transaction at no additional cost to you. Any of the big national HSA administrators listed at www.healthsavingsaccount-hsa.com can provide additional assistance with the transaction.