A health savings account or HSA is a tax-advantaged savings account owned by an individual that can be used to pay for qualified medical expenses for the owner and their dependents. An HSA, which must be paired with an HSA-qualified health plan, allows you and your employees to make pre-tax contributions to a federally-insured account that can be used to pay for qualified medical expenses. HSA-qualified health plans typically cost less than traditional plans and the money saved can be deposited into an HSA for immediate use or long-term savings. HSA balances earn tax-free interest, roll over from year to year and can be invested to accelerate growth. At age 65, HSA funds can be withdrawn for any reason and are taxed as income, just like an IRA or 401(K). Tax-free distributions are still available for qualified medical expenses.