LPFSA Overview

Limited Purpose FSA Overview

A limited purpose FSA (LPFSA) is a tax-advantaged benefit account for people who also have an HSA. However, as the name says, its use is limited. An LPFSA can only cover qualified vision and dental expenses.

LPFSA Qualified Expenses

With an LPFSA, participants are restricted on what the account can cover. Basically, an LPFSA is for vision and dental expenses only. 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.

Use your LPFSA for dental and vision expenses!

LPFSA Contributions

The money put into the LPFSA is on a pre-tax basis. That means you don’t pay taxes on what goes into the account. Plus, you use the money tax-free for qualified expenses. 

FSA Contribution Limits

In 2020, participants may choose to set aside up to $2,750 in their FSA.

Use It or Lose It, Grace Period or Rollover

Depending on your company’s plan setup, your LPFSA will have one of the following:

  • 2.5 month grace period to spend unused funds, or 
  • Rollover of up to $500 to the next plan year, or
  • “Use it or lose it” – if the money hasn’t been used, you lose it

No Double-Dipping on Claims!

Since you have an LPFSA with an HSA, there is one important rule. If you claim an expense through your LPFSA, you cannot claim it again through your HSA (and vice versa).

One tip to maximize usage of your accounts is to pay for your vision and dental costs first from the LPFSA until the money is gone; that way, you can take advantage of the tax-free account growth with your HSA.

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LPFSA Overview

FSA Contribution Limits

In 2020, participants may choose to set aside up to $2,750 in their FSA.

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