H.S.A account with new employer vs. old employer

[melissaforpeace315]

I had an HSA account with my old employer. I quit that job, and started a new job and thus have an HSA account with a different administrator.  

My question is what is the difference between a rollover and transfer? Am I correct in assuming that a rollover means that the money/cash in my previous HSA account will be sent to me via check? And that a transfer would mean that the money/cash in my previous HSA account will be sent to the new HSA administrator via check?

Which option would be best?  (best, in terms of ease of transaction, and the propensity of the IRS finding the transaction to be questionable). I just would like to transfer all my money from my previous HSA account to my new HSA account with as less hassle as possible and preempt any IRS query.   Is a "transfer" a better option than a "rollover"?  If so, why?  I appreciate your help 🙂 

[Mike9241]

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. 

[Opus 17]

They are both technically rollovers.  Another terminology would be a direct rollover (from bank to bank) and indirect rollover (where you get a check and forward it yourself).  A direct rollover is preferable for several reasons, but both are allowable if done properly.