Flexible Spending Account
A limited-purpose flexible spending account (LPFSA) allows you to deduct a set amount of pre-tax money from each paycheck to pay for certain IRS-qualified out-of-pocket dental and vision expenses, such as dental and vision checkups, copays, braces, and glasses for you and your dependents.
Simply use your LPFSA debit card at the point of sale for services, or file a claim for reimbursement. Since the IRS governs this pre-tax benefit, you can only use your LPFSA funds for IRS-approved dental and vision expenses.
- Dental & vision co-insurance, copayments, and deductibles
- Artificial teeth and dentures
- Dental crowns and fillings
- Dental X-rays
- Occlusal guards
- Non-cosmetic dental & vision office visits, exams, and operations
- Contact lenses and contact lens solution
- Transportation & lodging for dental or vision care
- Prescription eyeglasses and sunglasses
- Lasik eye surgery & radial keratotomy
- Shipping and handling fees on eligible expenses
Download a printable summary of the LPFSA:
Watch this video for a quick overview of FSAs!
Answers to your questions
Questions? We have answers! Here are your most frequent LPFSA questions.
Q: How does the LPFSA work?
A: Determine how much you need during the year for out-of-pocket dental & vision expenses. We withhold that amount from your pre-tax pay in equal installments and deposit it into your LPFSA.
When you have an eligible expense, submit a claim or use your LPFSA debit card. Save your receipts to verify expenses.
Q: Who is eligible for an LPFSA?
A: Anyone currently using an HSA. You cannot use HSA and health FSA concurrently since both apply funds to medical expenses.
Q: What's the annual maximum?
A: The maximum may adjust annually for inflation. For the current maximum, see IRS Publication 969. There is no minimum.
Q: When is this money available?
A: Like the FSA, the LPFSA is a front-loaded account. This means the funds are available to use at the beginning of the year or on your initial eligibility date.
Because this tax-free benefit is overseen by the IRS, you may at any time be asked to provide documentation for claims on expenses. Be sure to keep your receipts. You will be required to submit itemized receipts with any claims for reimbursement.
Q: What is the "use it or lose it" rule?
A: The IRS's "use it or lose it" rule requires unused funds to be forfeited at the end of the plan year.
Participants have 90 days from the end of the plan year to file claims for the previous year's expenses.
You may roll a certain amount of unused funds to the next year. See IRS Publication 969 for the latest roll-over amount. Other unused funds are lost.
Q: Can I have both FSA and HSA?
A: Although IRS rules state you can't have both an HSA and FSA in the same tax year, you may utilize an LPFSA concurrently with HSA. This account is available to those who may not be enrolled in a group medical plan.
You maximize your savings and tax benefits by restricting your FSA reimbursement to only vision and dental expenses with an LPFSA and using it in conjunction with an HSA. Spouses are each eligible for their own individual LPFSAs, up to the maximum allowable election per calendar year.
Q: Can I change my elections any time?
A: You can change your election only within 30 days of a federally-qualifying event or during annual enrollment. Since this is a pre-tax, front-loaded account, the election must remain fixed for the entire year. Calculate your expected dental & vision care expenses carefully so you do not elect too much or too little.
If your employment ends, you may claim LPFSA expenses incurred only through the date of your termination. You must submit all claims within 30 days of your termination. Any funds not claimed within that time frame may be forfeited.