*What is a Limited Purpose FSA?

A Limited Purpose FSA is a Medical FSA designed to allow Health Savings Account (HSA) participants an opportunity to set aside pre-tax funds to pay for out-of-pocket vision, dental and preventive care services.  The following items can be covered in a Limited Purpose FSA:

Vision Care: Out-of-pocket expenses for LASIK surgery, eye exams, eye glasses (frames & lenses), contact lenses & solution, prescription sunglasses, safety glasses and over-the-counter reading glasses.

Dental Care: Out-of-pocket expenses for dental cleanings, fluoride treatments, extractions, x-rays, fillings, crowns, bridges, dentures, denture adhesives, implants and orthodontia.

Preventive Care: Out-of-pocket expenses for periodic health exams, tests and diagnostic procedures in conjunction with evaluation, well-baby care, immunizations for adults and children, tobacco cessation and weight loss programs for obesity.

Participation in a General Flexible Spending Arrangements (FSAs) will make you ineligible for an HSA.  If your employer offers a “limited purpose” (limited to dental, vision or preventive care) or “post-deductible” (pay for medical expenses after the plan deductible is met) FSA, then you can still be eligible for an HSA.

Participation on a Health Reimbursement Arrangements (HRAs) will make you ineligible for an HSA.  If your employer offers a “limited purpose” (limited to dental, vision or preventive care) or “post-deductible” (pay for medical expenses after the plan deductible is met) HRA, then you can still be eligible for an HSA.  If your employer contributes to an HRA that can only be used when you retire, you can still be eligible for an HSA.