What changed in this filing

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Item 1. Business

2021-03-31 compared with 2020-03-31 · 125 added, 69 removed, 216 unchanged (47% of the section changed)

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Consumers and employers use our platforms to manage tax-advantaged health savings accounts (“HSAs”) and other consumer-directed benefits (“CDBs”) offered by employers, including flexible spending accounts and health reimbursement arrangements (“FSAs” and “HRAs”), Consolidated Omnibus Budget Reconciliation Act (“COBRA”) administration, commuter and other benefits, compare treatment options and pricing, evaluate and pay healthcare bills, receive personalized benefit information, access remote and telemedicine benefits, earn wellness incentives, and receive investment advice to grow their tax-advantaged healthcare savings.

We believe the secular shift to greater consumer responsibility for healthcare costs will require a significant portion of the approximately 190 million under-age 65 consumers with private health insurance in the United States to use platforms such as ours.

We believe the secular shift to greater consumer responsibility for healthcare costs will require a significant portion of consumers under the age of 65 with private health insurance in the United States to use platforms such as ours.

The core of our offerings is the HSA, a financial account through which consumers spend and save long-term for healthcare expenses on a tax-advantaged basis.

As of January 31, 2021, we administered 5.8 million HSAs, with balances totaling $14.3 billion, which we call HSA Assets.

During the years ended January 31, 2020 and 2019, we added approximately 1.5 million and 679,000 new HSAs, respectively.

During the fiscal years ended January 31, 2021 and 2020, we added approximately 0.7 million and 1.5 million new HSAs, respectively, which reflects in 2019 our acquisition of WageWorks, Inc.

(the "WageWorks Acquisition").

Also, as of January 31, 2021, we administered 7.0 million complementary CDBs.

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We reach Clients primarily through a sales force that calls on Clients directly, relationships with benefits brokers and advisors, and integrated partnerships with a network of health plans, benefits administrators, benefits brokers and consultants, and retirement plan recordkeepers, which we call Network Partners.

As of January 31, 2020, our platforms were integrated with 165 Network Partners and more than 100,000 Clients.

We have grown our share of the growing HSA market from 4% in calendar year 2010 to 16% in 2019, including by 3% as a result of the acquisition of WageWorks on August 30, 2019.

According to Devenir, today we are the largest HSA provider by accounts and second largest by assets.

As of January 31, 2021, our platforms were integrated with 174 Network Partners, and we serve approximately 100,000 Clients.

We have increased our share of the growing HSA market from 4% in calendar year 2010 to 16% in 2020, measured by HSA Assets.

According to Devenir, we are currently the largest HSA provider by accounts and second largest by assets.

In addition, we believe we are the largest provider of other CDBs.

We seek to differentiate ourselves through our proprietary technology, product breadth, ecosystem connectivity, and service-driven culture.

Our proprietary technology is designed to help consumers optimize the value of their HSAs and other CDBs, as they gain confidence and skill in their management of financial responsibility for lifetime healthcare.

Our ability to engage consumers is enhanced by our platforms’ capacity to securely share data in both directions with others in the health, benefits, and retirement ecosystems, which we call Ecosystem Partners.

Our proprietary technology is designed to help consumers optimize the value of their HSAs and other CDBs and gain confidence and skills in managing their healthcare costs as part of their financial security.

Our ability to engage consumers is enhanced by our platforms’ capacity to securely share data in both directions with others in the health, benefits, and retirement ecosystems.

Our commuter benefits offering also leverages connectivity to an ecosystem of mass transit, ride hailing, and parking providers.

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We earn interchange revenue mainly from fees paid by merchants on payments that our members make using our physical payment cards and virtual platforms.

See “Key components of our results of operations” for additional information on our sources of revenue.

Acquisition of WageWorks

On August 30, 2019, we completed the acquisition (the "Acquisition") of WageWorks, Inc.

("WageWorks") and paid approximately $2.0 billion in cash to WageWorks stockholders, financed through net borrowings of approximately $1.22 billion under a new term loan facility and approximately $816.9 million of cash on hand.

We expect the Acquisition to enable us to increase the number of our employer opportunities, the conversion of these opportunities to Clients, and the value of Clients in generating members, HSA Assets and complementary CDBs.

WageWorks’ strength of selling to employers directly and through health benefits brokers and advisors complements our distribution through health plans, benefit administrators and retirement record-keeping partners.

With WageWorks’ CDB capabilities, we are working to provide employers with a single partner for both HSAs and other CDBs, which is preferred by the vast majority of employers according to research conducted for us by Aite Group.

For Clients that partner with us in this way, we believe we can produce more value by encouraging both CDB participants to contribute to HSAs and HSA-only members to take advantage of tax savings by increasing their account balances in other CDBs.

See “Key components of our results of operations” for additional information on our sources of revenue, including the adverse impacts caused by the ongoing COVID-19 pandemic.

WageWorks Acquisition

On August 30, 2019, we completed the WageWorks Acquisition and paid approximately $2.0 billion in cash to WageWorks stockholders, financed through net borrowings of approximately $1.22 billion under a new term loan facility and approximately $816.9 million of cash on hand.

The key strategy of the WageWorks Acquisition was to enable us to increase the number of our employer sales opportunities, the conversion of these opportunities to Clients, and the value of Clients in generating members, HSA Assets and complementary CDBs.

WageWorks’ historic strength of selling to employers directly and through health

benefits brokers and advisors complemented our distribution through Network Partners.

With WageWorks’ CDB capabilities, we provide employers with a single partner for both HSAs and other CDBs, which is preferred by the vast majority of employers according to research conducted for us by Aite Group.

Accordingly, we believe that there are significant opportunities to expand the scope of services that we provide to our Clients.

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Our specialists can assist users with such tasks as optimizing the use of tax-advantaged accounts to reduce medical spending or selecting from among medical plans offered by an employer or health plan.

We acquired several other technology platforms as part of the Acquisition.

We acquired several other technology platforms as part of the WageWorks Acquisition.

These additional technology platforms are designed to be highly scalable based on an on-demand delivery model that Clients and members may access through a standard web browser on any internet-enabled device, including computers, smart phones, and other mobile devices such as tablet computers.

Our on-demand delivery model for these platforms eliminates the need for our Clients to install and maintain hardware and software in order to support CDB programs and enables us to rapidly implement product enhancements across our entire user base.

We intend to phase out over time certain technology platforms, which will require us to migrate certain Clients to one of our remaining technology platforms.

We are working to phase out certain technology platforms, which requires us to migrate certain Clients to one of our remaining technology platforms.

Health savings accounts.

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Investment platform and advisory services.

We offer a mutual fund investment platform and an online-only automated investment advisory service to all of our members whose account balances exceed a stated threshold.

We offer a mutual fund investment platform and access to an online-only automated investment advisory service to all of our members whose account balances exceed a stated threshold.

These services are entirely elective to the member.

The advisory service is delivered through a web-based tool, Advisor TM , which is offered and managed by HealthEquity Advisors, LLC, our SEC-registered investment adviser subsidiary.

HealthEquity Advisors, LLC provides investment advice to its clients exclusively through the Advisor TM tool on an interactive website.

Members who utilize our mutual fund investment platform or subscribe for Advisor TM services pay asset-based fees, which include the cost of the advisory service and all trading commissions and other expenses associated with transactions made through these online tools.

Advisor TM provides investment education guidance and management, including maintaining HSA cash (liquidity) in amounts directed by the member, targeting risk appropriate portfolio diversification, and mutual fund selection.

We offer three levels of service to investors:

The advisory service is delivered through a web-based tool, Advisor, which is offered and managed by HealthEquity Advisors, LLC, our SEC-registered investment adviser subsidiary.

HealthEquity Advisors, LLC provides investment advice to its clients exclusively through the Advisor tool on an interactive website.

Members who utilize our mutual fund investment platform or subscribe for Advisor services pay asset-based fees, which include the cost of the advisory service and all other expenses associated with transactions made through these online tools.

Advisor provides investment education guidance and management, including maintaining HSA cash (liquidity) in amounts directed by the member, targeting risk appropriate portfolio diversification, and mutual fund selection.

We offer investors access to three levels of service:

• Self-driven:

For members who do not subscribe for Advisor TM , we provide a mutual fund investment platform to invest HSA balances.

Neither we nor Advisor TM provides advice to members in respect of investments among funds on the platform;

Advisor TM provides guidance and advice, but the member makes the final investment decisions and implements portfolio allocation and investment advice through the HealthEquity platform;

• Auto-pilot:

Advisor TM manages the account and implements portfolio allocation and investment advice automatically for the member.

For members who do not subscribe for Advisor, we provide a mutual fund investment platform to invest HSA balances.

Neither we nor Advisor provides advice to members in respect of investments among funds on the platform;

• GPS powered by HealthEquity Advisors, LLC:

Advisor provides guidance and advice, but the member makes the final investment decisions and implements portfolio allocation and investment advice through the HealthEquity platform;

• AutoPilot powered by HealthEquity Advisors, LLC:

Advisor manages the account and implements portfolio allocation and investment advice automatically for the member.

Regardless of the level of service selected, members are responsible for their proportionate share of fees and expenses payable by the underlying mutual funds and other investment vehicles in which they invest.

Flexible spending accounts.

Healthcare flexible spending accounts.

Healthcare FSAs are employer-sponsored CDBs that enable employees to set aside pre-tax dollars to pay for eligible healthcare expenses that are not generally covered by insurance, such as co-pays, deductibles and over-the-counter medical products, as well as vision expenses, orthodontia, and medical devices.

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The IRS imposes a limit, indexed to inflation, on pre-tax dollar employee contributions made to healthcare FSAs.

The IRS also allows a carryover of up to $500 that does not count against or otherwise affect the indexed salary reduction limit applicable to each plan year.

The IRS also allows a carryover of up to 20% of the indexed contribution limit that does not count against or otherwise affect the indexed salary reduction limit applicable to each plan year.

Employers are able to contribute additional amounts in excess of this statutory limit and may choose to do so in an effort to mitigate the impact of rising healthcare costs on their employees.

Under the Consolidated Appropriations Act of 2021, employers are permitted to amend FSA plans to remove carryover limitations and extend grace periods for 2020 and 2021 plan years.

Dependent care flexible spending accounts.

We also administer FSA programs for dependent care plans.

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Current laws and regulations impose a statutory limit on the amount of pre-tax dollars employees can contribute to dependent care FSAs with no carryover allowed.

Like healthcare FSAs, employers can also contribute funds to employees’ dependent care FSAs, subject to the statutory annual limit on total contributions.

The American Rescue Plan Act of 2021 temporarily increased the contribution limit for the 2021 plan year.

Like healthcare FSAs, employers can also contribute funds to employees’ dependent care FSAs;

however, these are subject to the statutory annual limit on total contributions.

As with healthcare FSAs, employers realize payroll tax savings on the pre-tax dependent care FSA contributions made by their employees.

In March 2016 WageWorks was selected by the United States Office of Personnel Management (“OPM”) to administer its Federal Flexible Spending Account Program (“FSAFEDS”).

Under the Consolidated Appropriations Act of 2021, employers are permitted to amend FSA plans to remove carryover limitations and extend grace periods for 2020 and 2021 plan years.

HealthEquity administers the United States Office of Personnel Management's (“OPM”) Federal Flexible Spending Account Program (“FSAFEDS”).

This relationship provides eligible federal government employees access to our advanced technology platforms and premium service capabilities.

In addition, the United States Postal Service became a member of the OPM contract during the first quarter of 2017.

These relationships were acquired by us through the Acquisition.

Health reimbursement arrangements.

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As part of our COBRA program, we offer a direct billing service where former employee participants pay us directly as opposed to their employers for coverage they elect to continue.

We handle the accounting and customer services for such terminated employees, as well as interfacing with the carrier regarding the employees’ eligibility for participation in the COBRA program.

We handle the accounting and customer services for such terminated employees, as well as interfacing with the carrier regarding the employees’ eligibility for

participation in the COBRA program.

The American Rescue Plan Act of 2021 provides a temporary 100% subsidy of COBRA premium payments for eligible individuals who lost coverage due to an involuntary termination for up to 6 months.

Commuter Programs.

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Employers are permitted to provide employees with commuter benefits including qualified transit (which includes vanpooling) and parking.

The maximum monthly federal (and sometimes state) tax free exclusion is adjusted for inflation.

The maximum monthly federal (and sometimes state) tax free exclusion is indexed for inflation.

For 2021, the maximum pre-tax monthly limits are $270 for qualified transit and $270 for qualified parking.

In March 2021, we bolstered our commuter offering with the acquisition of Luum, which provides employers with a suite of commute tools as well as real-time commute data, to help them design and implement flexible return-to-office and hybrid-workplace strategies and benefits.

Our technology

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We are increasing investment in our technology and communications systems to support new opportunities and enhance security, privacy, and platform infrastructure.

During the years ended January 31, 2020, 2019, and 2018, we capitalized software development costs of $24.1 million, $9.3 million, and $8.1 million, respectively.

In addition, we incurred $23.8 million, $13.7 million, and $12.2 million, respectively, in software development costs primarily related to the post-implementation and operation stages of our proprietary software.

Our solution is hosted on a virtual private cloud with an ability to scale on demand.

Our solution is hosted via cloud-based services and on a virtual private cloud with an ability to scale on demand.

This allows us to quickly support our current and projected growth.

We utilize multiple redundant third-party data centers to ensure continuous access and data availability.

We utilize regional cloud failover and multiple redundant third-party data centers to ensure continuous access and data availability.

The data centers are purpose-built facilities for hosting mission critical systems with multiple built-in redundancy layers to minimize service disruptions and meet industry-standard measures.

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Many of these are state or federally chartered banks and other financial institutions for which we believe technology-based healthcare services are not a core business.

Certain of our direct competitors have chosen to exit the market despite increased demand for these services.

This has created, and we believe will continue to create, opportunities for us to leverage our technology platforms and capabilities to increase our market share.

However, some of our direct competitors (including well-known mutual fund companies such as Fidelity Investments and healthcare service companies such as United Health Group's Optum) are in a position, should they choose, to devote more resources to the development, sale and support of their products and services than we have at our disposal.

Some of our direct competitors (including healthcare service companies such as United Health Group's Optum, Webster Bank, and well-known retail investment companies, such as Fidelity Investments ) are in a position to devote more resources to the development, sale and support of their products and services than we have at our disposal.

In addition, numerous indirect competitors, including benefits administration technology and service providers, partner with banks and other HSA custodians to compete with us.

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Bundled solution for HSAs and complementary CDBs.

We are the largest custodian and administrator of HSAs (by number of accounts), as well as a market-share leader in each of the major categories of complementary CDBs, including FSAs and HSAs, COBRA and commuter benefits administration.

Our Clients and their benefits

advisors increasingly seek HSA providers that can deliver an integrated offering of HSAs and complementary CDBs.

With WageWorks’ CDB capabilities, we can provide employers with a single partner for both HSAs and complementary CDBs, which is preferred by the vast majority of employers, according to research conducted for us by Aite Group.

Our Clients and their benefits advisors increasingly seek HSA providers that can deliver an integrated offering of HSAs and complementary CDBs.

With our CDB capabilities, we can provide employers with a single partner for both HSAs and complementary CDBs, which is preferred by the vast majority of employers, according to research conducted for us by Aite Group.

We believe that the combination of HSA and complementary CDB offerings significantly strengthens our value proposition to employers, health benefits brokers and consultants, and Network Partners as a leading single-source provider.

Proprietary and integrated technology platforms.

We have proprietary cloud-based technology platforms, developed and refined during more than a decade of operations and acquired through the Acquisition, which we believe are highly differentiated in the marketplace for a number of key reasons:

We have proprietary cloud-based technology platforms, developed and refined during more than a decade of operations and acquired through the WageWorks Acquisition, which we believe are differentiated in the marketplace for a number of key reasons:

• Purpose-built technology:

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We believe our differentiated distribution platforms provide a competitive advantage by efficiently enabling us to reach a growing consumer market.

Our platforms are built on a business-to-business-to-consumer, or B2B2C, channel strategy, whereby we work with Network Partners to reach consumers in addition to marketing our services to these potential members directly.

Our platforms are built on a business-to-business-to-consumer, or B2B2C, channel strategy, whereby we work with Network Partners and Clients to reach consumers in addition to marketing our services to these potential members directly.

Reaching the consumer is critical in order for us to increase the number of our HSA members.

We work directly with our Network Partners to reach the consumer in various ways.

Our Health Plan and Administrator Partners collectively employ thousands of sales representatives and account managers who promote

both the Health Plan and Administrators Partner’s health insurance products, such as HDHPs, and our HSAs.

Our Employer Partners collectively employ thousands of human resources professionals who are tasked with explaining the benefits of our HSAs to their employees.

Our sales and account management teams work with and train the sales representatives and account management teams and the human resource professionals of our Network Partners on the benefits of enrolling in, contributing to, and saving and spending through our HSAs, and our Network Partners then convey these benefits to prospective members.

We work directly with our Network Partners and Clients to reach the consumer in various ways.

Our health plan and administrator partners collectively employ thousands of sales representatives and account managers who promote both the health plan and administrators partner’s health insurance products, such as HDHPs, and our HSAs.

Our Clients collectively employ thousands of human resources professionals who are tasked with explaining the benefits of our HSAs to their employees.

Our sales and account management teams work with and train the sales representatives and account management teams of our Network Partners and the human resource professionals of our Clients on the benefits of enrolling in, contributing to, and saving and spending through our HSAs, and our Network Partners and Clients then convey these benefits to prospective members.

As a result of this collaboration, we develop relationships with each member who enrolls in an HSA with us.

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Selectively pursue strategic acquisitions.

We have a successful history of acquiring HSA portfolios and businesses that strengthen our platform, including the recent acquisition of WageWorks.

We have a successful history of acquiring HSA portfolios and businesses that strengthen our platform.

We expect to continue this growth strategy and regularly evaluate opportunities.

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to hold custodial assets for individual account holders and use discretion to direct investment of such assets held.

As a passive and non-passive non-bank custodian, the Company must maintain net worth (assets minus liabilities) greater than 2% of passive custodial funds held at each calendar year-end and 4% of the non-passive custodial funds held at each calendar year-end in order to take on additional custodial assets.

As of December 31, 2019, the Company's year-end for trust and tax purposes, the net worth of the Company exceeded the required thresholds.

As a passive and non-passive non-bank custodian, the Company must maintain net worth (assets minus liabilities) greater than 2% of passive custodial funds held at each fiscal year-end and 4% of the non-passive custodial funds held at each fiscal year-end in order to take on additional custodial assets.

As of January 31, 2021, the Company's year-end for trust and tax purposes, the net worth of the Company exceeded the required thresholds.

Privacy and data security regulations

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Nonpublic personal information includes information that is collected or generated in the course of offering a financial product or service.

For example, nonpublic personal information includes information submitted by a prospective account holder in an application, an account holder’s name and contact information, and transaction information.

Because part of our business is the administration of financial products such as HSAs, we are required under the Consumer Financial

Protection Bureau’s financial privacy rule under GLBA to send a notice of privacy practices to account holders and to comply with restrictions on the disclosure of nonpublic personal information to non-affiliated third parties.

For example, nonpublic personal information includes information submitted by a prospective account holder in an

application, an account holder’s name and contact information, and transaction information.

Because part of our business is the administration of financial products such as HSAs, we are required under the Consumer Financial Protection Bureau’s financial privacy rule under GLBA to send a notice of privacy practices to account holders and to comply with restrictions on the disclosure of nonpublic personal information to non-affiliated third parties.

We are also required under GLBA to establish reasonable administrative, technical, and physical safeguards to protect the security, confidentiality, and integrity of nonpublic personal information pursuant to the Federal Trade Commission’s safeguards rule.

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States also have laws and regulations that impose additional restrictions on our collection, storage, and use of personally identifiable information.

Privacy regulation has become a priority issue in many states, including California, which in 2018 enacted the California Consumer Privacy Act broadly regulating California residents’ personal information and providing California residents with various rights to access and control their data.

Privacy regulation has become a priority issue in many states, including California, which in 2018 enacted the California Consumer Privacy Act ("CCPA") broadly regulating California residents’ personal information and providing California residents with various rights to access and control their data.

We expect further privacy requirements to be applicable to us as a result of the recently passed California Privacy Rights Act, as it significantly modifies the CCPA by expanding consumers’ rights with respect to certain sensitive personal information.

Our private-sector clients’ FSAs, HRAs, COBRA continuation insurance, and other account-based retirement plans are covered by the Employee Retirement Income Security Act of 1974, as amended, or ERISA, which governs “employee benefits plans.” Title I of ERISA does not generally apply to HSAs.

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The reforms included new excise taxes that incentivize employers to provide health benefits (including HSA-compatible benefits) to all full-time employees and new coverage mandates for health plans.

The rules directly affect health FSAs and HRAs and have an indirect effect on HSAs.

Further changes to the Affordable Care Act and related healthcare regulation remain under consideration, including proposed "Medicare for all" plans.

The rules directly

affect health FSAs and HRAs and have an indirect effect on HSAs.

Further changes to the Affordable Care Act and related healthcare regulation remain under consideration, including "Medicare for all" plans.

Investment Advisers Act of 1940

Our subsidiary HealthEquity Advisors, LLC is an SEC-registered investment adviser that provides web-only automated investment advisory services to members.

As an SEC-registered investment adviser, it must comply with

the requirements of the Investment Advisers Act of 1940, or the Advisers Act, and related Securities and Exchange Commission, or SEC, regulations and is subject to periodic inspections by the SEC staff.

As an SEC-registered investment adviser, it must comply with the requirements of the Investment Advisers Act of 1940, or the Advisers Act, and related Securities and Exchange Commission, or SEC, regulations and is subject to periodic inspections by the SEC staff.

Such requirements relate to, among other things, fiduciary duties to clients, disclosure obligations, recordkeeping and reporting requirements, marketing restrictions limitations on agency cross and principal transactions between the adviser and its clients, and general anti-fraud prohibitions.

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Our sole geographic market is the U.S.

We refer to our employees as our team members.

As of January 31, 2020, we had 2,931 team members, including 1,958 in service delivery, 495 in technology and development, and 478 in sales and marketing, general and administrative.

We consider our relationship with our team members to be good.

None of our team members are represented by a labor union or are party to a collective bargaining agreement.

Human capital

HealthEquity is comprised of people dedicated to empowering consumers to connect health and wealth by delivering remarkable service.

We refer to our culture as “DEEP Purple,” which stands for Driving Excellence, Ethics and Process while providing remarkable service to our clients and members.

We believe that our DEEP Purple culture is a key differentiator that drives the success of our company through, among other things, attracting and retaining top talent.

DEEP Purple is the essence of our company, and we invest a lot of time and energy to support and maintain it.

Our board of directors and its committees provide oversight on certain human capital matters.

The Talent, Compensation and Culture Committee of our board of directors acts on behalf of the board to review and determine executive compensation plans, policies and programs, oversee the Company’s culture and related strategies, programs and risks, and oversee the Company’s talent management, development and retention efforts and related strategies, programs, and risks, including with respect to diversity and inclusion.

As of January 31, 2021, we had 3,001 full-time team members and 38 part-time team members, including 1,905 in service delivery, 554 in technology and development, and 580 in sales and marketing, and general and administrative positions.

Our team members reside in 44 states across the United States.

Of these team members, 37% were men and 63% were women, with 33% people of color.

Fewer than 1% of team members did not specify gender, and 14% percent did not specify race.

We seek and collect feedback from our team members to assess engagement through our semi-annual team member engagement survey.

The survey focuses on team member loyalty, engagement, and satisfaction indicators.

The surveys conducted during the COVID-19 pandemic have shown positive increases in our team members’ engagement, satisfaction, and loyalty.

We believe this is a result of the Company’s responsive action, transparent communication, and sense of care for their personal well-being.

Diversity and inclusion

As an employer, we celebrate the diversity of our team members and strive for consistent inclusion.

We strive to make HealthEquity a place where diversity of thought, culture, orientation, identity, and experience enhance every aspect of what we do.

We recognize the value of diversity and inclusion in our business practices.

We believe that

inclusion and equality in the workplace are key to team members feeling happier and more comfortable in their work environment and that this translates to higher productivity, increased motivation and improved performance.

As part of our diversity and inclusion ("D&I") efforts, in 2019 we established a D&I committee to support our initiatives and drive our D&I goals.

Dubbed the “Created Equal Committee” – a name chosen through a team member survey – the committee seeks to reflect President Abraham Lincoln’s description of our nation as one “conceived in liberty and dedicated to the proposition that all men [and women] are created equal.”

We believe that a diverse workforce is critical to our success, and we continue to focus on the hiring, retention and advancement of women and underrepresented populations.

Our recent efforts have been focused in three areas:

inspiring innovation through an inclusive and diverse culture;

expanding our efforts to recruit and hire world-class diverse talent;

and identifying strategic partners to accelerate our diversity and inclusion programs.

Health, Safety and Wellness

HealthEquity also seeks to ensure that team members have the working conditions they need to succeed.

The health and well-being of our team members at work are foremost among our concerns.

We encourage our team members to follow common sense safety practices and correct any unsafe condition or report it to their supervisor.

We are committed to maintaining a safe workplace free from unlawful drugs and alcohol in accordance with applicable law and free from harassment.

HealthEquity supports these measures through extensive training as well as formal grievance procedures and policies.

In response to the COVID-19 pandemic, we have prioritized the health and safety of our team members.

This includes having the vast majority of our team members work from home, while implementing additional safety measures for team members continuing critical on-site work.

In addition, the Company has established a conditionally based paid leave policy to support team members who have been directly impacted by COVID-19.

HealthEquity has also helped team members maintain a healthy work-life balance and juggle competing needs during the pandemic by supporting flexible work schedules.

HealthEquity has maintained a strong focus to support the holistic health of our team members, offering a variety of recurring sessions addressing their mental, emotional, and physical health and that of their dependents.

Equitable Pay Philosophy and Benefits

HealthEquity is proud to be a workplace where hard work is valued and rewarded.

We are committed to pay equity, which is being implemented through our Total Rewards program.

Our pay philosophy is intended to foster a program that supports the Company’s mission, values, and culture.

We believe that our greatest asset is our people, and our Total Rewards program is designed to attract and retain talented team members who drive the Company’s success.

The program is intended to be fair and easy to understand so that all team members and their managers understand the goals and outcomes.

HealthEquity strives to administer the program in a manner that is applied consistently, equitably, and free of discrimination.

HealthEquity believes in sharing the financial success of the Company and rewarding individual performance through offering participation in a bonus plan to all non-commissioned team members.

The bonus pool is funded based on the financial performance of the Company, and team members' performance against objectives determines the individual payouts earned.

We believe in approaching team member health holistically.

Our benefits philosophy is rooted in the foundational beliefs that – first – all areas of health are intertwined, and – second – that when team members are thriving in mental, emotional, physical, social, and financial health, they are in the best position to succeed personally and provide remarkable service professionally.

Accordingly, HealthEquity provides our team members a variety of comprehensive, consumer-driven healthcare medical plans offered in conjunction with generous HSA contributions from the Company, a 401(k) plan that offers Company contributions, a subsidized dental plan, voluntary vision coverage, paid maternity and parental leaves, and importantly, a holistic wellness plan that supports the continued development of our team members’ mental, physical, financial, emotional, and social health.

Talent Development

HealthEquity is dedicated to maintaining our Purple culture by helping team members succeed in their current roles and reach their ultimate career goals.

We know that supporting individual career growth benefits not only our team members, but also our Company, our clients, and our members.

A full 99% of the Purple team was involved in training during fiscal year 2021, logging more than 106,000 hours of training and compliance, including 85,000 hours of instructor-led training and 21,000 hours of online training.

Team members logged approximately 30 hours of training on average in important areas such as the HealthEquity Code of Conduct and other compliance policies and measures.

Corporate information

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Copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available, free of charge, on our investor relations website as soon as reasonably practicable after we file such material electronically with or furnish it to the SEC.

The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business