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HSA Owners: Let’s talk about the Limited Purpose FSA!

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Limited Purpose FSA Overview

A limited purpose FSA (LPFSA) is a tax-advantaged benefit account available only to those with an HSA. You may use the LPFSA to pay for qualified vision and dental expenses.

Contributions and Rollover

LPFSAs have the same contribution limit as a healthcare FSA at $2,650, and participants contribute on a pre-tax basis. Depending on setup, at the end of the year your plan may have a 2.5 month grace period to spend unused funds, or rollover of up to $500, or “use it or lose it.”

Learn more about 2018 FSA contribution limits.

Qualified Expenses

With an LPFSA, participants are restricted to a limited number of eligible expenses: vision and dental. Common eligible expenses include:

Vision

  • Co-insurance, copayments, deductibles for vision insurance plans
  • Contact lenses and solution
  • Eye exams
  • Eyeglasses
  • Vision procedures (Laser eye surgery, Lasik, etc.)

Dental

  • Co-insurance, copayments, deductibles for dental insurance plans
  • Dental care (non-cosmetic)
  • Dentures, bridges, and certain veneers
  • Orthodontia
  • Dental x-rays

Contact your benefits administrator for a full list of eligible expenses.

No Double-Dipping on Claims!

It’s important to remember that if you claim an expense through your LPFSA, you cannot claim it again through your HSA (and vice versa).

Additional Information about the Limited Purpose FSA

For more information about LPFSAs, check out these blogs from the Captain:

  • FSA Primer: Health FSAs, LPFSAs, and Dependent Care FSAs – Did you know that FSAs aren’t just for healthcare expenses? In fact, there are three common variations to the FSA. Let’s take a look at Health FSAs, Limited Purpose FSAs, and Dependent Care FSAs.
  • Can I Have an FSA and HSA at the Same Time? – Generally speaking, you cannot have a health FSA and HSA at the same time. However, there are a couple of exceptions: limited purpose FSAs and dependent care FSAs.
  • Use it or Lose it, Carryover, Grace Period and Run Out – If you signed up for an FSA, chances are you’ve heard a few terms that you may or may not be familiar with. It’s important to fully understand phrases like “use it or lose it”, “carryover”, “grace period” and “run out”.
 

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