I have HSA funds from a previous job that's managed by a local bank. Thus far I've just left it in there and filed a claim when I needed to.

Today I got a notice that the bank will no longer be managing HSA accounts. They will be automatically transferring all accounts to another financial institution that does this. I have until March to decide if I want to have them
A) transfer to another institution of my choice
B) cash it out.

I would rather cash it out. But don't I get penalized for cashing out a HSA account? But will I in this scenario?

Will call on Monday but just trying to think ahead.

Thanks!