Handoff is a part of "Continuity" introduced by Apple with iOS 8 and OS X Yosemite. Continuity allows users to "seamlessly" move between their iOS devices and Mac, according to Apple. For example, iPhone users can receive and make calls on their iPad or iPod touch using Continuity.
Continuity is one of the major features of iOS 8 and Yosemite that was touted so highly during Apple's media events earlier this year. It connects all of your iOS 8 and Yosemite devices and includes features like Handoff, which allows you to transfer tasks from one device to another (like starting an email on your iPhone and then continuing it on your iMac), message and call relaying, and personal hotspot. While Handoff requires Bluetooth 4.0 (find out if your devices have it here), message and call relaying do not.
Making calls and receiving them on your Mac is really a great feature. No more walking across the room or, God forbid, up the stairs to grab your phone while you're trying to get work done on your computer. Once you have this set up, you can simply