Distributions from an HSA for the qualified medical expense of you or your spouse or tax dependents who are covered by the high-deductible health plan are generally excludable from income for federal tax income purposes if such expenses are not covered by insurance. Distributions used for any other purpose are includable in income and may also be subject to an additional 20 percent tax. This 20-percent penalty tax does not apply to distributions made after your death, disability or attainment of age 65.