In the United States, what are the upsides and downsides of doing an HSA rollover contribution vs. an HSA trustee-to-trustee transfer?

I am aware that:

  • one cannot do more than one HSA Rollover Contribution per year whereas there is no limit on the amount of HSA trustee-to-trustee transfer.
  • one can use the rollover as a temporary "loan" (< 60 days, hence the maximum one HSA Rollover Contribution per year limit), unlike with a trustee-to-trustee transfer where by definition the transfer is directly from a trustee to another trustee.

What else?

  • I believe the only 1 per year is the only real difference in how a rollover is treated by the IRS. The "temp loan" ability would be the only practical difference. Of course, if you are the forgetful type and fail to get it rolled over before the 60 days (or whatever you used the "temp loan" for goes south and you don't have the money to do so) you'll pay the penalty for using that option. – topshot Mar 12 at 12:53

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