One time IRA to HSA transfer

[Cat-tirement]

Has anyone used the allowed once in a lifetime transfer from an IRA to a HSA? How did it work for you? (I searched the forums for HSA info, but didn't really see anything on this aspect.)

My MegaCorp is offering a HSA qualified HDHP next year. Unfortunately, they are not offering the HSA itself, and HSA contributions from me will be after tax, and therefore I cannot get the FICA avoidance on my contributions. Also, I can't really swing making a max HSA contribution without reducing my 401k or Roth contributions (already nearly max'ed out). So I am considering funding the HSA initially with this IRA to HSA transfer. My HDHP will be a family plan, so I would transfer $6550 plus a $1000 over-55 catch-up.

I am wondering if DW would be allowed to make her own once in a lifetime transfer to her own HSA at some time in the future. We expect that she will work for a couple of years after my ER, and our health insurance would be through her employer during that time.

My intent is to use the HSA primarily as a backdoor IRA to sort-of Roth conversion for post-retirement health expenses, and don't anticipate using it for current health expenses (except maybe for a big emergency).

[Dwhit]

I have not looked into this much, but I seem to recall you have to keep the High Deductable insurance policy for 12 months after you transfer, or the funds are considered taxable, with penalty if applicable.

With Obamacare imposing new requirements, I am not currently educated enough to know if the HD policies will be around for very long. I would want to confirm that aspect before transferring any money.