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Transfer of HSA account

January 1, 2010

Q:My employer is offering a qualified High Deductible Medical plan for myself and my family. My employer is offering a qualified High Deductible Medical plan for myself and my family. My employer will make some contributions to my HSA account for me and my family separate from my own contributions.I am aware of the maximum HSA contribution limits regardless of who makes the contributions for the '2008 tax year.  (Family account maximum contribution is $5,800.00 under age 50). My employer is a financial institution and is depositing contributions to an account in my name held at our, (bank) company on my behalf.  The fees, charges for checks and debit card charges are being waived. I wish to have a HSA account at another institution where I can earn a significantly higher yield.  May I make routine transfers by check from the HSA account my employer has established for me to my "other" preferred HSA account by check without negative tax consequences? Can routine transfers be made from one HSA account to another HSA account as long as all applicable limits are monitored and not exceeded?

A: Yes. Employers may limit HSA options for their own business purposes but those limitations have no limiting effect on the options of their employees. You may transfer funds without limittion and use any other HSA account as proposed.

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