HSAs allow Americans under age 65 to make tax-deductible contributions to a special account tied to a high-deductible health insurance policy. Earnings inside the HSA are tax-deferred (just like in an IRA). To be eligible to contribute to an HSA, you must have a qualified high-deductible insurance policy. Money from the HSA can be used tax- and penalty-free to pay the insurance policy deductible, co- payments and any other qualifying expenses. Money left in the account at the end of a year can be rolled over to the next year. Nonqualifying withdrawals of earnings before age 65 are taxed and a 10 percent penalty is imposed. After you reach age 65, contributions to the HSA must cease and non-qualifying withdrawals are taxed but not penalized.