A health savings account (HSA) is a tax-exempt trust or custodial account created to pay or reimburse qualified medical expenses. In general, any adult covered by a high-deductible health plan may establish an HSA. Eligible individuals can contribute to an account on their own behalf, or someone else, such as an employer or family member, can contribute on that eligible individual’s behalf. Furthermore, HSAs are designed to provide some tax benefits to offset health care costs. Contributions not made by an employer are deductible on that individual’s tax return, regardless of whether they itemize deductions. Contributions from employers may be excluded from gross income. The interest and other earnings on the assets in the account are tax free. Distributions from an HSA that are used to pay qualified medical expenses are not taxed, but if a distribution is not used for a qualified medical expense, it is taxed at a rate of 20%.