To close a HealthEquity HSA, you need to either spend down or transfer your remaining balance, then request account closure through HealthEquity’s member portal or by contacting their member services team. HealthEquity charges a $25 account closure fee, which is deducted from your remaining balance before the account is finalized.
Steps to Close Your Account
HealthEquity doesn’t offer a single “close account” button that handles everything at once. You’ll need to deal with your balance first, then formally close the account. Here’s the general process:
- Use or move your funds. Spend your remaining balance on qualified medical expenses, or transfer the money to another HSA (more on this below). You can also request a cash distribution, though that may have tax consequences.
- Confirm no pending transactions. Make sure any reimbursement requests, debit card charges, or investment trades have fully settled before you initiate closure. Outstanding transactions can delay or complicate the process.
- Request closure. Log into the HealthEquity member portal or call their member services team to formally request that your account be closed. They will deduct the $25 closure fee from whatever balance remains.
If your balance is under $25, you’ll want to spend it on eligible expenses first, since the closure fee would otherwise consume it entirely. If your balance is exactly zero, contact member services to confirm how the fee is handled.
The $25 Closure Fee
HealthEquity charges a flat $25 fee when you close your HSA. This fee covers continued access to your account history in the member portal, including your full transaction record, claims, and statements. It also covers tax forms for each year your account was active with HealthEquity, and ongoing access to member services for any questions that come up after closure.
The fee is deducted directly from your remaining balance, so you don’t need to pay it separately.
Transferring Your Balance to Another HSA
If you’re closing your HealthEquity account because you want to move your money to a different HSA provider, you have two options: a trustee-to-trustee transfer or a rollover. The distinction matters for your taxes.
A trustee-to-trustee transfer moves funds directly from HealthEquity to your new HSA custodian without you ever touching the money. This is the cleaner option. It’s not reported as income, not treated as a contribution, and doesn’t generate any tax forms. You can do unlimited trustee-to-trustee transfers per year, and the amount transferred doesn’t count against your annual HSA contribution limit. To start one, open an account with your new HSA provider and ask them to initiate a transfer of assets from HealthEquity. Most providers have a form for this.
A rollover means HealthEquity sends the funds to you (typically by check or direct deposit), and you deposit them into your new HSA within 60 days. If you miss that 60-day window, the IRS treats the money as a taxable distribution, and if you’re under 65, you’ll owe an additional 20% penalty. You’re also limited to one rollover per 12-month period. The rollover gets reported on your taxes, though it’s not included in your taxable income as long as you complete it on time.
For most people, the trustee-to-trustee transfer is the better choice. It’s simpler, carries no deadline pressure, and has no annual limit.
Closing After Leaving Your Employer
Your HSA belongs to you, not your employer. If you’ve left a job, been terminated, or retired, you keep the account and every dollar in it. Your former employer has no claim on the balance and can’t close the account on your behalf.
That said, your fee structure may change once you’re no longer enrolled through an employer. Many employer-sponsored HSAs have reduced or waived monthly maintenance fees as part of the benefits package. Once that employer relationship ends, HealthEquity may begin charging small bank fees that were previously covered. If you notice new monthly charges appearing, that’s likely why, and it’s a good reason to either transfer your balance to a lower-cost HSA or close the account altogether.
Tax Implications of Closing
How closing your HSA affects your taxes depends entirely on what you do with the money. If you transfer it to another HSA through a trustee-to-trustee transfer, there are no tax consequences at all. If you spend the balance on qualified medical expenses, that’s also tax-free.
If you take a cash distribution for non-medical purposes, the full amount is added to your taxable income for the year. On top of that, if you’re under 65, you’ll owe a 20% penalty on the distribution. After age 65, the penalty goes away, but the distribution is still taxed as ordinary income, similar to a traditional IRA withdrawal.
HealthEquity will continue providing tax forms for each year your account was active, even after closure. Keep records of any qualified medical expenses you used HSA funds for, in case the IRS ever asks for documentation.
If Your Balance Is Invested
If you’ve invested part of your HSA balance in mutual funds or other investments through HealthEquity’s investment platform, you’ll need to sell those positions and move the proceeds back to your cash balance before closing. Investment trades typically take a few business days to settle. Plan for this extra step so it doesn’t delay your closure timeline.