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The Vanguard Group

Health savings accounts (HSAs): Q&A

Last updated: 31 Mar 2014  BenefitsMailbox, Ext. 34BEN or 800-407-8576


Do I need to name a beneficiary for my HSA?

Yes. You are required to name a beneficiary for your HSA.

How do I designate or change a beneficiary on my HSA account?

To designate or change a beneficiary on your account, you will need to:

  1. Complete the Designation of Beneficiaries Form under Take action.
  2. Return the completed form by mail or fax to Health Savings Administrators at 10800 Midlothian Tpk, Ste 240, Richmond, VA 23235, Fax: 804-726-1570.

Note: Beneficiaries are not established during the online enrollment process. Once your enrollment is complete, Health Savings Administrators will mail you a Welcome Kit with the beneficiary form included.

Do I need to make primary and contingent beneficiary designations?

You should name both a primary and a contingent beneficiary.

  • The primary beneficiary will receive 100% of your account balance upon your death.
  • The contingent beneficiary will receive the account balance if the primary beneficiary predeceases you.

You can name more than one person as your primary beneficiary and more than one person as your contingent beneficiary. If you name more than one person, indicate the specific whole-number percentage of your balance to be paid to each beneficiary.

Note: Make sure your allocation percentages (for primary and for contingent) each total 100%.

How often should I review my beneficiary designation?

You should review and update your beneficiary designations periodically, particularly when you experience a major life event, such as a birth, marriage, divorce, or a death in the family.

Am I required to list my spouse as the beneficiary if I am married?

You may choose whomever you want to be the beneficiary of your HSA; however, only spousal beneficiaries are able to preserve the tax advantages upon a spouse's death.

If designated as beneficiary of your HSA, your spouse will not be responsible for taxes on distributions for qualified medical expenses upon inheriting the account.

As beneficiary, your spouse becomes owner of your HSA, allowing him or her to:

  • Make tax-free distributions from the HSA for qualified medical expenses.
  • Maintain tax-free growth of the funds in the account.
  • Contribute to the account if he or she has HSA-qualified insurance (HDHP).

Note: Your spouse will not lose the ability to make tax-free withdrawals for qualified medical expenses if he or she does not qualify to contribute to the HSA.

If you fail to designate a beneficiary, or are married and name someone other than your spouse as beneficiary, the account ceases to be an HSA upon your death. As a result, the fair market value of the account becomes taxable in the year of your death for non-spousal beneficiaries.

Note: Any qualified medical expenses you incur before your death may be reimbursed from the account before determining the "fair market value" of the account.

Please consult your tax advisor if you have questions about the potential tax consequences associated with your HSA beneficiary designation.


Contact Health Savings Administrators at 888-354-0697, Monday through Friday from 8:30 a.m. to 5 p.m., Eastern time. You can also e-mail questions to customerservice@hsaadministrators.com.