Once you have deposited funds into a health savings account (HSA), you can use these funds to pay for qualified medical epenses ta-free. This is true even if you no longer have coverage under a High Deductible Health Plans (HDHP).  Your account roll automatically roll over every year and will remain in the account in left unused. There is no time limit on using the funds. If you are no longer insured under an HDHP, you can no longer make annual contributions into your HSA. If you regain HDHP coverage at a later date, you can begin making contributions to your HSA again. You can continue to use your account ta-free for out-of-pocket health epenses.  When you enroll in Medicare, you can use your account to pay Medicare premiums, deductibles, co-pays, and coinsurance under any part of Medicare.  Once you turn age 65, you can also use your account to pay for things other than medical epenses.  If used for other epenses, the amount withdrawn will be taable as income but will not be subject to any other penalties.  Individuals under age 65 who use their accounts for non-medical epenses must pay income ta and a 10% penalty on the amount withdrawn. — June 30, 2009 @ 2:19 pm