Rollovers from health care FSAs and HRAs permitted

(a) In general Section 106 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: (h) FSA and HRA rollovers to health savings accounts (1) In general A plan shall not fail to be treated as a health flexible spending arrangement or health reimbursement arrangement under this section or section 105 merely because such plan provides for a qualified HSA rollover distribution. (2) Qualified HSA rollover distribution For purposes of this subsection, the term qualified HSA rollover distribution means any portion of a beneficiary’s unused balance of a health flexible spending arrangement or health reimbursement arrangement at the end of any plan year (or such other times as the Secretary may provide) which is transferred in a direct trustee-to-trustee transfer to a health savings account of such beneficiary. (3) Treatment as HSA rollover contribution For purposes of this title, a qualified HSA rollover distribution shall be treated as a contribution described in section 223(e)(5).. (b) Effective date The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.