Limited Purpose FSA

The Limited Purpose Health Flexible Spending Account (LPF) allows the additional benefit of qualifying to participate in a tax-advantaged Flexible Spending Account while also being able to fund their individual Health Savings Account (HSA).

Reimbursements are limited to vision and dental expenses, making participation in this account compatible with contributing to a Health Savings Account (HSA).

The LPF is designed to be compatible with a Health Savings Account. Because the LPF limits reimbursements to vision and dental expenses, you can maximize the benefits in your HSA by allowing funds to accumulate toward deductible expenses while using separate pre-tax dollars in your LPF to pay for out-of-pocket vision and dental expenses.

If your employer allows it under their LPF plan design, employers who anticipate having large deductible expenses can use their LPF as a "Post Deductible FSA" once they have met the minimum out-of-pocket deductible expense as required by the IRS (see your organization's benefits administrator for details). This means that employees can be reimbursed for any general-purpose medical expenses that were incurred after the date that the employee met the minimum out-of-pocket deductible expense required by the IRS.