Overview
HealthEquity is one of the largest custodians of Health Savings Accounts (HSAs) and other consumer-directed benefits in the United States. When an account holder passes away, the estate representative or named beneficiary must notify HealthEquity to resolve the account.
The process for HealthEquity accounts—specifically HSAs—differs significantly from standard bank accounts due to IRS tax regulations. The treatment of the funds depends entirely on who the beneficiary is: a spouse, a non-spouse, or the estate.
This guide covers HealthEquity's specific "Instructions Upon Death" process, the required forms, and the tax implications you should be aware of.
This guide provides informational guidance only. It is not legal advice, and SwiftProbate is not a law firm. Laws and institutional procedures change — verify current requirements directly with HealthEquity and consider consulting a qualified attorney.
Notification Process
How to Notify HealthEquity of a Death
Step 1: Gather Initial Information
Before contacting HealthEquity, have the following ready:
- Decedent's full legal name and Social Security number
- HealthEquity ID number (if known)
- Date of death
- Your relationship to the decedent
- Beneficiary information (if you are the named beneficiary)
Step 2: Call Member Services
HealthEquity does not have a separate "estate" phone line; their Member Services team handles death notifications 24/7.
- Phone: 866-346-5800
- Hours: 24 hours a day, 7 days a week
When you call, inform the representative that the account holder has passed away. They will:
- Verify the decedent's account.
- Place a freeze on the account to prevent unauthorized withdrawals.
- Direct you to the "HSA Instructions Upon Death" form.
- Confirm the current fax number for document submission (fax numbers may vary by department).
Step 3: Complete the "HSA Instructions Upon Death" Form
This is the primary document HealthEquity requires. You can download it from their support center or request it be mailed to you. The form allows you to select how funds should be distributed based on your relationship (Spouse, Non-Spouse, or Estate).
Step 4: Submit Required Documents
Mail or fax the completed form and the death certificate to HealthEquity. When you call, confirm the current fax number for death notifications, as fax numbers may vary by department.
Mail to:
HealthEquity, Attn: Member Services
PO Box 14374
Lexington, KY 40512
Fax:
Confirm current fax number when you call Member Services at 866-346-5800
Step 5: Processing and Liquidation
Once HealthEquity receives your documents:
- Review time: Typically within 2 business days.
- Investment liquidation: If the HSA holds investments, HealthEquity will liquidate them into cash.
- Blackout period: A 5-business-day blackout period is applied where no transactions can occur.
- Distribution: Funds are distributed via check or transfer after the blackout period.
Required Documents
Documents HealthEquity Requires
The documents needed depend on who is claiming the funds.
Always Required
| Document | Details |
|---|---|
| Certified Death Certificate | A clear copy is often accepted, but certified is preferred |
| HSA Instructions Upon Death Form | The specific HealthEquity form indicating distribution preference |
If You Are the Surviving Spouse
| Document | Details |
|---|---|
| HSA Instructions Upon Death Form | Select "Surviving Spouse" option to transfer to your own HSA |
If You Are a Non-Spouse Beneficiary
| Document | Details |
|---|---|
| HSA Instructions Upon Death Form | Select "Designated Non-Spouse Beneficiary" option |
| W-9 Form | May be required for tax reporting (HSA becomes taxable income) |
If Claiming for the Estate (No Beneficiary)
| Document | Details |
|---|---|
| Court Appointment Papers | Letters Testamentary or Letters of Administration |
| Small Estate Affidavit | Accepted if the estate qualifies under state small estate laws |
| Executor's ID | Copy of government-issued photo ID |
Account Types
How HealthEquity Handles Different Account Types
Health Savings Account (HSA) - Spousal Beneficiary
If the spouse is the designated beneficiary, the HSA is treated as the spouse's own HSA.
- Process: The spouse can transfer funds to their existing HealthEquity HSA, open a new one, or transfer to another custodian.
- Tax Implication: No immediate tax liability; funds remain tax-advantaged.
Health Savings Account (HSA) - Non-Spouse Beneficiary
If a non-spouse (child, sibling, friend) is the beneficiary, the account ceases to be an HSA on the date of death.
- Process: The account is closed, and a check is issued to the beneficiary.
- Tax Implication: The fair market value of the account becomes taxable income to the beneficiary for that tax year.
Health Savings Account (HSA) - Estate (No Beneficiary)
If no beneficiary was named, the funds go to the decedent's estate.
- Process: The executor must provide court documentation. Funds are issued via check to "The Estate of [Name]".
- Tax Implication: The value is included in the decedent's final income tax return.
Flexible Spending Account (FSA) / HRA
These accounts generally do not have a survivor benefit in the same way HSAs do.
- Process: Claims for expenses incurred prior to death can usually still be submitted by the estate.
- Timeline: Check with the employer's plan administrator, as rules vary by company plan.
State Considerations
How Your State Affects the HealthEquity Process
HealthEquity operates nationally, but state laws impact beneficiary designations and probate.
Community Property States
If the account holder lived in a community property state (AZ, CA, ID, LA, NV, NM, TX, WA, WI) and named a non-spouse beneficiary, the spouse may need to consent to the designation. If no consent is on file, the spouse may have a claim to 50% of the account.
Small Estate Affidavits
If the HSA funds go to the estate and the total estate value is small, you may use a Small Estate Affidavit instead of formal probate.
- Thresholds: Vary by state (e.g., $184,500 in California, $75,000 in Texas).
- Process: Submit the notarized affidavit along with the death certificate and HealthEquity form.
For detailed probate requirements, see our state and county probate guides.
Timelines
How Long HealthEquity Takes to Release Funds
| Stage | Estimated Timeline |
|---|---|
| Document Review | 2 business days after receipt |
| Investment Liquidation | 1–3 business days |
| Blackout Period | 5 business days (mandatory hold) |
| Check Issuance | 7–10 business days after blackout |
| Electronic Transfer | 2–3 business days after blackout |
Total Estimated Time: 2–3 weeks from the time you mail the documents.
Tips & Pitfalls
Common Pitfalls and Tips
Investments Must Be Liquidated
HealthEquity will not transfer mutual funds or stocks in-kind to a beneficiary (unless it's a spousal transfer to a HealthEquity HSA). All investments are sold, and the cash proceeds are distributed.
The "Tax Trap" for Non-Spouse Beneficiaries
Unlike a life insurance payout, an inherited HSA is fully taxable as ordinary income for non-spouse beneficiaries. Be prepared for a 1099-SA form and set aside funds for taxes.
Don't Use the Debit Card
Do not use the decedent's HealthEquity Visa debit card after their death. This is considered an unauthorized distribution and can complicate the estate process.
Check for "Authorized Signers" vs. Beneficiaries
Being an "authorized signer" or having a card on the account does not make you a beneficiary. Only the formally designated beneficiary (or the estate) can claim the funds.