The IRS has stated that someone receiving medical benefits from the VA is not disallowed from making HSA contributions if the medical benefits consist solely of:
(1) disregarded coverage;
(2) preventive care; or
(3) hospital care or medical services under any law administered by the VA Secretary for service-connected disability.
The IRS is aware that identifying services provided by the VA specifically for service-connected disabilities is confusing for employers. Therefore, for purposes of administrative simplification with regard to HSA contributions, any hospital care or medical services received from the VA by a veteran who has a disability rating from the VA may effectively be considered to be hospital care or medical services under a law administered by the VA Secretary for service-connected disability.
Source: IRS Notice 2015-87, I.R.B. 2015-52, December 28, 2015.