What changed in this filing

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Item 1. Business

2022-03-31 compared with 2021-03-31 · 118 added, 80 removed, 261 unchanged (43% of the section changed)

Company overview

We are a leader and an innovator in providing technology-enabled services platforms that empower consumers to make healthcare saving and spending decisions.

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 consumers under the age of 65 with private health insurance in the United States to use platforms such as ours.

We are a leader and an innovator in providing technology-enabled services that empower consumers to make healthcare saving and spending decisions.

We use our innovative technology to manage consumers' 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”), and to administer Consolidated Omnibus Budget Reconciliation Act (“COBRA”), commuter and other benefits.

As part of our services, we and our subsidiaries provide consumers with healthcare bill evaluation and payment processing services, personalized benefit information, including information on treatment options and comparative pricing, access to remote and telemedicine benefits, the ability to earn wellness incentives, and investment advice to grow their tax-advantaged healthcare savings.

We believe the 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 offerings 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 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.

We refer to the aggregate number of HSAs and other CDBs on our platforms as Total Accounts, of which we had 12.8 million as of January 31, 2021.

As of January 31, 2022, we administered 7.2 million HSAs, with balances totaling $19.6 billion, which we call HSA Assets, as well as 7.2 million complementary CDBs.

We refer to the aggregate number of HSAs and other CDBs that we administer as Total Accounts, of which we had 14.4 million as of January 31, 2022.

We reach consumers primarily through relationships with their employers, which we call Clients.

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.

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

As of January 31, 2022, our platforms were integrated with 185 Network Partners, and we serve approximately 120,000 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.

We have increased our share of the growing HSA market from 4% in December 2010 to 18% as of December 2021, measured by HSA Assets.

According to Devenir, we are the largest HSA provider by accounts and second largest by assets as of December 2021.

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 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 proprietary technology allows us 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 assist consumers is enhanced by our 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.

These strengths reflect our “DEEP Purple” culture of remarkable service to customers and teammates, achieved by driving excellence, ethics, and process into everything we do.

Our business model provides strong visibility into our future operating performance.

As of the beginning of the past several fiscal years, we had approximately 90% visibility into the revenue of the subsequent fiscal year.

Our business model provides strong visibility into our future operating performance, with the vast majority of our accounts opened before the start of our fiscal year.

We earn revenue primarily from three sources:

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We earn custodial revenue mainly from HSA Assets held at our members’ direction in federally insured cash deposits, insurance contracts or mutual funds, and from investment of Client-held funds.

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

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

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.

Recent acquisitions

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.

On August 30, 2019, we completed our acquisition of WageWorks, Inc.

(the "WageWorks Acquisition") and paid approximately $2.0 billion in cash to WageWorks stockholders, financed through net borrowings of approximately $1.22 billion under our prior 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.

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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 available through other CDBs.

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

As of January 31, 2022, we had substantially completed our multi-year integration effort and achieved approximately $80 million in annualized ongoing net synergies.

We anticipate generating additional revenue synergies over the longer-term as our combined distribution channels and existing client base take advantage of the broader service offerings and as we continue to drive member engagement.

Luum acquisition.

In March 2021, we bolstered our commuter offering by acquiring 100% of the outstanding capital stock of Fort Effect Corp, d/b/a Luum (the "Luum Acquisition").

The aggregate purchase price for the acquisition consisted of $56.2 million in cash.

Luum provides employers with various commuter services, including access to real-time commute data, to help them design and implement flexible return-to-office and hybrid-workplace strategies and benefits.

Fifth Third Bank HSA portfolio acquisition.

On April 27, 2021, we signed an agreement to acquire the Fifth Third Bank, National Association ("Fifth Third") HSA portfolio, which consisted of $490.0 million of HSA Assets held in approximately 160,000 HSAs in exchange for a purchase price of $60.8 million in cash.

This acquisition closed on September 29, 2021.

Further acquisition.

On September 7, 2021, we signed an amended agreement to acquire the Further business (other than Further's voluntary employee beneficiary association business), a leading provider of HSA and other CDB administration services, with approximately 580,000 HSAs and $1.9 billion of HSA Assets, for $455 million in cash (the "Further Acquisition").

This acquisition closed on November 1, 2021.

HealthSavings HSA portfolio acquisition.

On December 4, 2021, we signed an agreement to acquire the Health Savings Administrators, L.L.C.

(“HealthSavings”) HSA portfolio, which consisted of $1.3 billion of HSA Assets held in approximately 87,000 HSAs in exchange for a purchase price of $60 million in cash.

This acquisition closed on March 2, 2022.

Our products and services

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

We acquired an additional technology platform as part of the Luum Acquisition, which provides Clients with various commuter services, including access to real-time commute data, to help Clients design and implement flexible return-to-office and hybrid-workplace strategies and benefits.

We are working to phase out certain technology platforms that we acquired in the WageWorks Acquisition, which requires us to migrate certain Clients to one of our remaining technology platforms.

We expect to complete these migrations during the fiscal year ending January 31, 2023.

Health savings accounts.

The Medicare Modernization Act of 2003 created HSAs, a tax-exempt trust or custodial account managed by a custodian that is a bank, an insurance company, or a non-bank custodian specifically authorized by the Internal Revenue Service, or IRS, as meeting certain ownership, capitalization, expertise, and governance requirements.

The Medicare Modernization Act of 2003 created HSAs, a tax-exempt trust or custodial account managed by a custodian that is a bank, an insurance company, or a non-bank custodian

specifically authorized by the Internal Revenue Service, or IRS, as meeting certain ownership, capitalization, expertise, and governance requirements.

We are an IRS-approved non-bank custodian of our members' HSAs, designated to serve as both a passive and non-passive non-bank custodian of HSAs.

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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.

Healthcare FSAs can be customized by employers so they have the freedom to determine what eligible expenses may be reimbursed under these arrangements.

Our employer Clients also realize payroll tax (i.e., FICA and Medicare) savings on the pre-tax contributions made by their employees.

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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.

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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.

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.

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.

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

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

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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.

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.

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 provided a temporary 100% subsidy of COBRA premium payments for eligible individuals who lost coverage due to an involuntary termination for up to six months, which ended September 30, 2021.

Commuter Programs.

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For 2022, the maximum pre-tax monthly limits are $280 for qualified transit and $280 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.

The Luum technology platform provides employers with various commuter services, including access to real-time commute data, to help them design and implement flexible return-to-office and hybrid-workplace strategies and benefits.

Our technology

Our proprietary technology is deployed as a cloud-based solution that is accessible to customers through the web and mobile devices.

Technology solution.

Our proprietary technology is deployed as a cloud-based solution that is accessible to customers online and through our mobile app.

We utilize a multi-tenant architecture that allows changes made for one Network Partner to be extended to all others.

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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.

Due to the sensitive nature of our customers’ data, we have a heightened focus on data security and protection.

We have implemented industry-standard processes, policies, and tools through all levels of our software development and network administration, reducing the risk of vulnerabilities in our system.

Data security and protection.

Due to the sensitive nature of our customers’ data that we hold, we have a heightened focus on data security and protection.

We maintain administrative, technical, and physical safeguards designed to protect confidential data.

Our Risk and Security team identifies security risks by working with state and federal law enforcement, security information-sharing organizations, and 24/7 system surveillance through internal and external detection and response teams.

In the event a security risk is detected, or a breach occurs, we are prepared with appropriate response protocols based on National Institute of Standards & Technology ("NIST") guidelines.

Our Security Incident Response Plan defines roles and responsibilities, incident severity levels, key contacts, post-incident steps, and guidelines for

Our procedures cover response steps for phishing attacks, ransomware, data breaches, and major vulnerabilities.

Lastly, we have an organic threat model that evaluates our security controls to help protect against attacker tactics, techniques, and procedures.

To help ensure our approach to customer privacy and security is effective and in line with industry standards, we follow risk management standards established by the Statement on Standards for Attestation Engagements 18 (SSAE-18) and Service and Organization Controls (SOC 1 and 2) reporting.

Our competitive landscape

Our direct competitors are HSA custodians and other CDB providers.

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.

Many of these are state or federally chartered banks and other financial institutions for which we believe benefits administration services are not a core business.

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.

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

Our Network Partners may also choose to offer competitive services directly, as some health plans have done.

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Our technology platforms are aligned with a healthcare environment that rewards consumer engagement and fosters an integrated consumer experience.

Leadership and first-mover advantage.

We have established a defensible leadership position in the HSA industry through our first-mover advantage, focus on innovation, and differentiated capabilities.

Our leadership position is evidenced by the quadrupling of our market share (measured by HSA Assets), from 4% in December 2010 to 16% in December 2020, as noted by the 2020 Devenir HSA Research Report, which indicates we are the second largest HSA custodian by market share measured by HSA Assets.

We have established a defensible leadership position in the HSA industry through our focus on innovation, and differentiated capabilities.

Our leadership position is evidenced by the increase in our market share (measured by HSA Assets), from 4% in December 2010 to 18% in December 2021, as noted by the 2021 Devenir HSA Research Report, which indicates we are the second largest HSA custodian by market share measured by HSA Assets.

Complete solution for managing consumer healthcare saving and spending.

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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 WageWorks Acquisition, which we believe are differentiated in the marketplace for a number of key reasons:

Proprietary and integrated technology solution.

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

• Purpose-built technology:

Our platforms were designed specifically to serve the needs of healthcare consumers, health plans and employers.

Our solution was designed specifically to serve the needs of healthcare consumers, health plans and employers.

We believe they provide greater functionality and flexibility than the technologies used by our competitors, many of which were originally developed for banking, benefits administration or retirement services.

We believe we are one of few providers with platforms that encompass all of the core functionality of healthcare saving and spending in integrated, secure, and compliant systems, including custodial administration of individual savings and investment accounts, card and electronic funds transaction processing, benefits enrollment and eligibility, electronic and paper medical claims processing, medical bill presentment, tax-advantaged reimbursement account and health incentive administration, HSA trust administration, online investment advice, and sophisticated analytics.

We believe we are one of few providers with a solution that encompass all of the core functionality of healthcare saving and spending in integrated, secure, and compliant systems, including custodial administration of individual savings and investment accounts, card and electronic funds transaction processing, benefits enrollment and eligibility, electronic and paper medical claims processing, medical bill presentment, tax-advantaged reimbursement account and health incentive administration, HSA trust administration, online investment advice, and sophisticated analytics.

• Data integration:

Our technology platforms allow us to integrate data from disparate sources, which enables us to seamlessly incorporate personal health information, clinical insight, and individually tailored strategies into the consumer experience.

Our technology solution allows us to integrate data from disparate sources, which enables us to seamlessly incorporate personal health information, clinical insight, and individually tailored strategies into the consumer experience.

We currently have more than 20,000 distinct integrations with health plans, pharmacy benefit managers, employers, and other benefits provider systems.

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• Configurability:

Our flexible technology platforms enable us to create a unique solution for each of our Network Partners.

Our flexible technology solution enables us to create a unique solution for each of our Network Partners.

For example, a HealthEquity team member can readily configure product attributes, including integration with a partner’s chosen healthcare price transparency or wellness tools, single sign on, sales and broker support sites, branding, member communication, custom fulfillment and payment card, savings options and interest rates, fees, and mutual fund investment choices.

Differentiated consumer experience.

We have designed our solutions and support services to deliver a differentiated consumer experience, which is a function of our culture and technology.

We believe this provides a significant competitive advantage relative to legacy competitors whom we believe prioritize transaction processing and benefits administration.

We have designed our solution and support services to deliver a differentiated consumer experience, which is a function of our culture and technology.

We believe this provides an advantage relative to legacy competitors whom we believe prioritize transaction processing and benefits administration.

We call our culture “DEEP Purple,” which we define as driving excellence, ethics, and process while providing remarkable service.

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We believe our DEEP Purple culture drives our success.

Our commitment to DEEP Purple has been rewarded with consumer loyalty scores that exceed those of most banks and traditional health insurers.

Large and diversified channel access.

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 and Clients to reach consumers in addition to marketing our services to these potential members directly.

Our solution is 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.

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Scalable operating model.

We believe that our technology is scalable because our products and services are accessed primarily through our technology platforms, which are cloud based.

We believe that our model is scalable because our services are accessed primarily through our cloud-based technology platforms.

After initial on-boarding and a period of education, our service costs for any given customer typically decline over time.

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Selectively pursue strategic acquisitions.

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

We have historically acquired HSA portfolios and businesses that strengthen our business.

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

We have developed an internal capability to source, evaluate, and integrate acquisitions that have created value for stockholders.

developed an internal capability to source, evaluate, and integrate acquisitions that have created value for stockholders.

We believe the nature of our competitive landscape provides significant acquisition opportunities.

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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.

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.

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Violations of HIPAA may also subject us to contractual remedies under the terms of agreements with covered entities.

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 ("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.

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

Privacy regulation in particular 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

Additional privacy requirements are applicable to us as a result of the California Privacy Rights Act of 2020, which significantly modified 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.

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.

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As of January 31, 2022, we had 3,688 full-time team members and 27 part-time team members, including 2,297 in service delivery, 655 in technology and development, and 763 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.

As January 31, 2022, our team members had the following demographic characteristics:

Leadership Team People Leaders All HealthEquity

Women 29 % 54 % 68 %

Men 71 % 46 % 32 %

Under age 30 0 % 5 % 18 %

Between ages 30 and 50 43 % 63 % 56 %

Over age 50 57 % 32 % 26 %

People of color 14 % 22 % 34 %

Diversity and inclusion

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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 justice, equity, diversity, and inclusion ("JEDI") in the workplace are key to team members feeling they can bring their true authentic self to their work environment and that this translates to higher productivity, increased motivation and improved performance.

At the heart of our JEDI efforts is the "Created Equal program".

Led by a diverse council, Created Equal promotes JEDI initiatives and our teammate-led business resource groups, which we call "Connections" groups.

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.

Our recent efforts have focused on three areas:

inspiring authenticity through an inclusive and diverse culture;

identifying diverse organizations to expand our candidate pool;

and strategically partnering with our Connections groups to accelerate our JEDI efforts.

Health, Safety and Wellness

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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.

This includes having the 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.

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.

In September 2021, the President of the United States signed an executive order, and related guidance was published that, together, require certain COVID-19 precautions for federal contractors, including mandatory COVID-19 vaccines for employees of federal contractors (subject to medical and religious exemptions) (the “Vaccine Mandate”).

While the Vaccine Mandate has been stayed by the courts, we are classified as a federal contractor due to a number of our agreements and believe we will be subject to the Vaccine Mandate if it is reinstated.

HealthEquity’s compliance with the Vaccine Mandate has and could continue to result in increased team member attrition and absenteeism.

Regardless of the Vaccine Mandate, HealthEquity has strongly encouraged all team members to work with their medical provider to get vaccinated against COVID-19.

In addition to providing practical education on the vaccine, HealthEquity has held multiple town halls for team members to ask questions and receive important information on vaccination.

Equitable Pay Philosophy and Benefits

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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.

We believe that our greatest asset is our people, and our Total Rewards program, which includes salary, incentive pay, equity, retirement, and health benefits, 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 strives to administer the program in a manner that is applied consistently, equitably, and free of discrimination, as follows:

• Maintaining competitive pay by reviewing market data annually;

• Ensuring that similar jobs are paid equitably across the organization;

• Rewarding team members based on their abilities, competencies, experience, and performance levels;

• Effectively communicating our Total Rewards policies and practices;

• Complying with all applicable federal, state, and local laws and requirements.

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.

To ensure the Total Rewards program is managed in a consistent and equitable way, all positions at HealthEquity are assigned a job and an associated pay grade.

That pay grade is determined using a formal job evaluation methodology based on a job’s purpose and key accountabilities described in the job description.

These components are the same for all positions across HealthEquity, regardless of level.

We believe in approaching team member health holistically.

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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.

Team Member Engagement

HealthEquity also considers team member engagement an important metric of organizational health.

We seek team member feedback, measure team member engagement, and measure our team member Net Promoter Score℠, or NPS ® , twice a year through a survey.

The team member NPS framework surveys team members to generate a total score based on the percentage of those who are promoters (responding with a score of 9 or 10), passives (a score of 7 or 8), and detractors (a score of 0 to 6).

Scores are calculated by subtracting the percentage of detractors from the percentage of promoters (the percentage of passives is not used in the formula).

Team member NPS scores can range from -100 to 100.

As of January 31, 2022, our team member NPS was 37, based on a participation rate of 89 percent.

Out of all responders, 55 percent were promoters, 27 percent were passives, and 18 percent were detractors.

"NPS ® " is a registered trademark of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.

Net Promoter Score℠ is a service mark of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld."

Corporate information

8 unchanged sentences

Our website is located at www.healthequity.com, and our investor relations website is located at ir.healthequity.com.

Information on our website is not incorporated into this report.

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.

1 unchanged sentence

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