a rollover is a distribution that occurs in an effort to move money between Health Savings Accounts that belong to the same owner. The key word is distribution. You must complete the rollover within 60 days after you received the distribution to avoid a penalty. An HSA can only receive one rollover contribution during a 1 year period which is not necessarily a calendar year. This restriction is on the receiving HSA account, not the originating account.
on the other hand, a direct transfer between HSA trustees is not a rollover. For example, if you instruct HSA Account 1 to transfer $500 to HSA Account 2, and they transfer directly without you ever seeing it, this is not a rollover. Instead, the IRS deems this a transfer. There is no limit on the number of these transfers. Do not include the amount transferred in income, deduct it as a contribution, or include it as a distribution on Form 8889.
you are correct as between rollover and transfer. a transfer is best. it's the easiest because you never have to handle the money or worry about meeting the 60 day deadline, it simplifies the reporting on form 8889.
