A Health Savings Account (HSA) is a savings account that you use to pay for routine health care expenses. HSA's are funded by you with pre-tax dollars. Your HSA funds are owned and controlled by you the account holder. Your HSA savings that are not used to pay eligible health care expenses remain in your fund year after year for future health care expenses or your retirement. Your HSA is portable; the funds remain with you regardless of employment. What can HSA funds be used for? The funds belong exclusively to the individual or employee. Funds can be withdrawn for any purpose, but if they are withdrawn for non-qualified medical expenses to someone under age 65, the non-qualified amount withdrawn is taxable and subject to a 10% penalty by the IRS. After age 65 there is no penalty for non-qualified withdrawals but the amount is taxable as ordinary income. Who is eligible? You are eligible if your are covered under a High Deductible Health Plan (HDHP) and you have no other Health Insurance coverage, you are not eligible for Medicare coverage and you may not be claimed as a dependent on someone else's return. Individuals, employees or employers can contribute to an HSA.