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Understanding Limited Purpose FSAs

 

February 14, 2023

3 minute read

Category: Reimbursement Accounts

Learn more about this blog article

What is an LPFSA?

Limited Purpose Flexible Spending Accounts (LPFSAs) can help save you money and cover eligible dental and vision expenses. Like all Flexible Spending Accounts (FSAs), the funds are set aside from your paycheck pre-tax to cover eligible purchases. You and your employer may contribute to the account.

What you need to know:

  • Full election amount is available the first day of the plan year
  • Election changes (or adjusting contribution amount) require a qualifying event (based on employer’s plan design)
  • “Use or lose” applies Account ends if you change jobs or retire, unless you are eligible for COBRA
  • Can be paired with a Health Savings Account (HSA)
  • May have a runoff period and a carryover or grace period

What are some LPFSA eligible expenses?

  • Prescription glasses
  • Contact lenses
  • Contact lens solution
  • Lasik Vision exams
  • Dental cleanings and fillings
  • Braces or invisible braces
  • Toothache and teething pain relievers

Pairing an LPFSA

An LPFSA can be paired with a Health Savings Account (HSA), allowing you to increase your medical expense contributions throughout the year. An HSA can be used for purchases like over-the-counter medicines, menstrual care products, pain relievers and more. At the end of the plan year, leftover HSA funds can rollover. You may choose to invest your HSA funds after you have reached a certain balance, increasing your investment diversity. Even if you change employers, an HSA will stay with you so that you can grow savings long-term. By pairing an LPFSA with an HSA, you’re able to save more of your dollars on a pretax basis and potentially spend less of your HSA funds, allowing you to build up that savings account for the future.

Learn more about LPFSAs >

Helpful HSA Articles:

  • Five HSA Facts You May Not Know >
  • Using Your HSA as a Long-Term Savings Vehicle >
  • HSAs: Who can participate and make contributions? >
 

Shop for Eligible Items on the FSA Store

You may purchase FSA-eligible items online at the FSA Store. Browse medical supplies, over-the-counter medication, prescriptions, and more.

Visit FSAStore.com

 

This blog is up to date as of December 2022 and has not been updated for changes in the law, administration or current events.

 
  • Tags:
  • LPFSA
  • FSA

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This information is intended to be educational. It is general in nature and should not be considered legal or tax advice. Consult an attorney or a tax professional regarding your specific situation. 

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https://americanfidelity.com/blog/reimburse/understanding-lpfsas/

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This information is intended to be educational. It is general in nature and should not be considered legal or tax advice. Consult an attorney or a tax professional regarding your specific situation. 

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