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Limited Purpose Flexible Spending Account (FSA)

What’s a Limited Purpose FSA?

This is a type of Health Care FSA account that can reimburse you for eligible dental and vision expenses when you are enrolled in an HSA plan. In some cases, other qualified health care expenses may be reimbursed once you have met your medical plan deductible.

How it works:*

  • This is the only type of Health Care FSA account that is allowable by the IRS when you are enrolled in an HSA plan either through your plan or your spouse’s plan. You can be reimbursed for eligible expenses from your Limited Purpose FSA or your HSA, not both.
  • Figure out how much you may need for eligible dental and vision expenses for you and your covered dependents for the plan year.
  • Decide how much to contribute from each paycheck up to the yearly limit set by the IRS guidelines.
  • You can withdraw money throughout the year to reimburse yourself for the eligible dental and vision expenses you’ve paid out-of-pocket.
  • You save money because you contribute to the account from your paycheck before taxes.**
  • Some plans include a debit card so you can easily pay from your account at the time of service.
  • You may be able to carry over up to $500 into the next plan year (depending on your employer’s plan).

*Plans vary, but this is how a Limited Purpose FSA generally works. Please refer to your plan documents, including specific information on your Limited Purpose FSA, or contact your employer for more information on what’s covered and not covered by your plan.

**Some cities and municipalities may impose income taxes on FSAs. For detailed information please contact your local department of taxation