However, there are certain common misconceptions about HSAs that should be dispelled when this product is offered to employees.

According to Tango Health, it's open enrollment time and if your company is offering a high-deductible health plan with a HSA option, then you may get some questions from your employees. Below are 5 common myths about HSAs you might hear when explaining HSAs to your employees.

Myth 1: Employees only need to open an HSA if they expect to have medical expenses.

There is no downside to opening an HSA as early as possible, even if an employee doesn't expect to have any medical expenses. From the day your employees establish their account, any medical expenses they incur will qualify for tax-free reimbursement, even if their HSA balance is zero when the expense happens. Even if they don't think they will have any ongoing medical expenses, something will inevitably pop up and if they haven't already opened their HSA, they won't be able to take advantage of the tax break. Having an HSA in place is also a great way for employees to save for expenses during retirement. The average medical expenses your employees can expect after retirement are north of $100,000, so it pays to save now. One of the great benefits of HSAs is that the funds can always be used to pay qualified health care expenses tax-free.

Myth 2: You have to pre-fund the account to get a tax break.

As long as your employees had an HSA open when they incurred the expense, they can still save taxes by funding their HSA afterwards. So let's say an employee has $25 in their HSA but they have to go the doctor and get a bill for $75. All they have to do is add more funds to their HSA at any point in the future (as long as they're still HSA eligible) and then reimburse themselves so they can get the tax break on the whole amount.

Myth 3: You can only change your deduction once per year.

The truth is the IRS states that employers must allow employees to change their payroll deduction to their HSA at least once a month¹. This makes HSAs easy to tailor to employees' needs since they can adjust their contributions based on their situation. It is important to make sure they don't over-contribute to their accounts because this can result in your company having to amend your tax reporting and pay taxes on the over-contributed amounts. Your employee will also pay a 6% tax penalty on the over-contributed amounts, unless those excess contributions are removed before the end of the tax year.

Myth 4: If you have single coverage, you can only use your HSA for yourself.

The good news is that your employees can use their HSA to pay for the expenses of anyone they claim on their taxes, even if the other individual is not on the employee's insurance plan. This rule means that employees can earn tax savings for costs they incur on qualified medical, dental, vision or prescription expenses for their spouse or tax dependents that are paid for or reimbursed from their own HSA.

Myth 5: You lose any unused funds at the end of the year.

The money that is deposited into your employee's HSA (even funds your company contributes) is theirs to use for as long as they have the account. Unlike Flexible Spending Accounts (FSAs), there are no "use it or lose it" rules for HSAs. Employees can use their HSA to pay for any qualified health expenses as long as there are funds in the account—even if they are no longer covered by an HDHP or have left your company.

Health Savings Accounts are great ways to maximize your health care dollars. According to the HSACenter, 2013 offers individuals and families additional opportunities to save for current and future health care with a health savings account:

• HSA holders can choose to save up to $3,250 for an individual and $6,450 for a family (HSA holders 55 and older get to      save an extra $1,000 which means $4,250 for an individual and $7,450 for a family) – and these contributions are 100% tax deductible from gross income.
• Minimum annual deductibles are $1,250 for self-only coverage or $2,500 for family coverage.
• Annual out-of-pocket expenses (deductibles, co-payments and other amounts, but not premiums) cannot exceed $6,250 for self-only coverage and $12,500 for family coverage.

For more detailed information on HSAs and taxes, visit the U.S. Department of Treasury Web site at www.ustreas.gov, or talk with your tax advisor. Regardless of your situation, using an HSA to help reduce insurance and medical costs is a viable alternative to traditional insurance plans with low deductibles and high premiums. Just know the facts, and then decide what works best for you.