I 
109TH CONGRESS 
1ST SESSION H. R. 3873 
To amend the Internal Revenue Code of 1986 to permit rollovers from 
retirement plans to health savings accounts. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 22, 2005 
Mr. FORTENBERRY introduced the following bill; which was referred to the 
Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to permit 
rollovers from retirement plans to health savings accounts. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. ROLLOVERS FROM RETIREMENT PLANS TO 
HEALTH SAVINGS ACCOUNTS. 
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 is amended 
by inserting after section 139A the following new section:
‘‘SEC. 139B. HSA FUNDING DISTRIBUTIONS. 
‘‘(a) IN GENERAL.—In the case of an eligible indi-
vidual, gross income does not include a qualified HSA 
funding distribution. 
‘‘(b) QUALIFIED HSA FUNDING DISTRIBUTION.— 
For purposes of this section, the term ‘qualified HSA 
funding distribution’ means any distribution from an eligi-
ble retirement plan of an eligible individual to the extent 
that such distribution is contributed to a health savings 
account of such individual (or of the surviving spouse, a 
dependent of the surviving spouse, or alternate payee (as 
defined in section 414(p)(8)) of such individual) not later 
than the 60th day after the day on which such individual 
(or such surviving spouse, dependent, or alternate payee) 
receives such distribution or in a direct trustee-to-trustee 
transfer. 
‘‘(c) DISTRIBUTION TREATED
AS ROLLOVER
TO 
HSA.—For purposes of sections 223 and 4973(g), a 
qualified HSA funding distribution shall be treated as a 
rollover contribution described in section 223(f)(5). 
‘‘(d) DEFINITIONS.—For purposes of this section— 
‘‘(1) ELIGIBLE RETIREMENT PLAN.—The term 
‘eligible retirement plan’ has the meaning given such 
term by section 402(c)(8)(B), except that such term 
shall also include an eligible deferred compensation
plan maintained by an eligible employer described in 
section 457(e)(1)(B). 
‘‘(2) ELIGIBLE INDIVIDUAL.—The term ‘eligible 
individual’ has the meaning given such term by sec-
tion 223(c)(1).’’. 
(b) 10-PERCENT PENALTY
ON EARLY DISTRIBU-
TIONS NOT TO APPLY.—Section 72(t)(2)(A) of such Code 
(relating to subsection not to apply to certain distribu-
tions) is amended by striking ‘‘or’’ at the end of clause 
(vi), by striking the period at the end of clause (vii) and 
inserting ‘‘, or’’, and by inserting after clause (vii) the fol-
lowing new clause: 
‘‘(viii) a qualified HSA funding dis-
tribution 
(as 
defined 
by 
section 
139B(b)).’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 401(k)(2)(B)(i) of such Code (relat-
ing to cash or deferred arrangements) is amended by 
striking ‘‘or’’ at the end of subclause (III), by strik-
ing ‘‘and’’ at the end of subclause (IV) and inserting 
‘‘or’’, and by inserting after subclause (IV) the fol-
lowing new subclause: 
‘‘(V) the funding of a health sav-
ings account under section 139B, 
and’’.
(2) Section 402(c)(4) of such Code (relating to 
rules applicable to rollovers from exempt trusts) is 
amended by striking ‘‘and’’ at the end of subpara-
graph (B), by striking the period at the end of sub-
paragraph (C) and inserting ‘‘, and’’, and by insert-
ing after subparagraph (C) the following new sub-
paragraph: 
‘‘(D) any qualified HSA funding distribu-
tion (as defined by section 139B(b)).’’. 
(3) Section 403(a) of such Code (relating to 
taxability of beneficiary under a qualified annuity 
plan) is amended by inserting after paragraph (1) 
the following new paragraph: 
‘‘(2) SPECIAL RULE FOR QUALIFIED HSA FUND-
ING DISTRIBUTION.—To the extent provided in sec-
tion 139B, paragraph (1) shall not apply to the 
amount distributed under the contract which is oth-
erwise includible in gross income under this sub-
section.’’. 
(4) Section 403(b) of such Code (relating to 
taxability of beneficiary under annuity purchased by 
section 501(c)(3) organization or public school) is 
amended by inserting after paragraph (1) the fol-
lowing new paragraph: