Health Savings Accounts ("HSA") are different from "HRA", "MSA" and "FSA", prior Plans. You must have a health insurance policy with a deductible of $2,000 per year for the family or individual policies having a deductible of at least $1,000 per year. You pay the deductible into the Account. Individuals cannot pay more than $5,000 per year under the Plan. Besides the HSA, with the deductible, you may have disability, dental, vision or long-term care insurance, but not a second Health Policy. People on Medicare are not eligible. Each year, individuals can deduct on Page 1 of Form 1040, contributions to the Plan, but not more than $2,600 individually. People born before 1950 can deduct an extra $500.00. Income earned on these deductible monies are not taxable nor are the withdrawals from the accounts taxable if used to pay medical expenses of the individual. Unused account assets are carried over year to year. Any withdrawal of funds for other than medical expenses are subject to a 10% penalty, plus the entire amount withdrawn is included as income for the year. There is no penalty for payouts after age 65 or made because of death or disability. You can carry over account balances from year to year. The deceased insured's account is included in his estate. Work with your health insurance carrier. From age 40 to 60, I never used my Health Insurance. What a boon this Plan would have been.