What to do when a HealthEquity account holder dies

Completed by the requestor. Available to download.¹

A surviving spouse may move the HSA to their existing HealthEquity HSA, a new HealthEquity HSA or an HSA at another custodian, or close it and take a check. A named non-spouse beneficiary can only close the HSA and take a check.¹

A surviving spouse, named or treated as the beneficiary when none was named, takes the HSA as their own. With no beneficiary and no surviving spouse, or when the estate is the named beneficiary, HealthEquity sells the account and pays the estate.²

If a non-spouse beneficiary's address is unknown or incorrect, the designation is void and the money passes to the estate or other successor in interest.³

HealthEquity sells any HSA investments for cash before processing the request, at the market price on the processing date. Investments cannot be transferred in kind.²

After the account is closed, an investment dividend of $3.00 or less goes to other active HSAs; only a dividend over $3.00 is paid by check. Where investments are sold, "the claimant is only entitled to receive the proceeds from the sale minus any expenses."³

Issues the HealthEquity Visa debit card, under a Visa U.S.A. license²

A spouse's check goes to the requestor and a named beneficiary's check to the beneficiary, each at their own address. An estate's check "will be made payable to the estate and sent to the requestor, unless otherwise indicated." The form warns a spouse that taxes and penalties may apply.¹

The estate's check can go to the estate or to the successor named in the estate paperwork, at the successor's choice; only the successor can change the payee address, with the court or small-estate paperwork attached. A minor's check goes to the estate or to the guardian in care of the minor.²

HealthEquity may pay "any estate, inheritance, income, or other tax or assessment attributable to any property, or interest held in the Account out of the assets of the Account."³

HealthEquity "strictly follows the custodial agreement in regard to account closures due to death and the process of sending funds to beneficiaries." A spouse's transfer "does not count as a contribution and therefore can occur even if the spouse is no longer on a qualified high-deductible health plan."²

HealthEquity may request "such documentation and certification deemed appropriate within the Custodian's discretion to verify and establish the identity of the beneficiary or the estate upon death of the Member."³

An adult guardian must hold and manage a minor beneficiary's funds until the beneficiary reaches the age of majority. HealthEquity requires guardianship paperwork and proof of the parent or guardian relationship.²

To protect itself against tax liability, HealthEquity may require releases or other documentation from the taxing authority, the member and each beneficiary or other payee, and indemnification from each payee.³

The form notes an "account closure fee may apply" when a named non-spouse beneficiary or the estate closes the HSA.¹

HealthEquity may charge a regular maintenance fee to hold funds for a non-spouse beneficiary, the estate or a successor until they are claimed or escheated. A reserve equal to the closing fee is held at all times and is never distributed.³

"Uncashed distribution checks will be voided and returned to the Account if outstanding for 180 days, regardless of whether issued to the Member or a third-party." The HSA is not escheatable unless the member dies with no surviving spouse beneficiary.³

The deceased account holder's HealthEquity Visa debit card must not be used after the date of death.²

An "Account Authorization" form the deceased person signed to give someone access to the account does not survive as authority to settle it. HealthEquity still requires the death certificate and the documents for the claimant's role.²

Any claim, including one by a beneficiary, spouse, successor or assign, goes to binding individual American Arbitration Association arbitration under the Federal Arbitration Act, heard in Draper, Utah. Claims under $10,000 may be heard by telephone or on written submissions.³