Benefits of enrolling in a Limited Purpose FSA
A limited-purpose FSA (LPFSA) is a Health Savings Account (HSA) eligible FSA plan that allows you to set aside pre-tax dollars for dental, vision, and orthodontia expenses for you and your dependents, even if they are not covered under your primary health plan. The Limited Purpose FSA covers these eligible expenses, tax-free while your HSA covers eligible medical expenses. It’s a great way to save on HSA dollars – especially if you choose to use your account to invest.
There is an abundance of benefits by enrolling in a LPFSA, notably:
- At the outset of the plan year, your LPFSA is pre-funded, and your full contribution amount is immediately available for use.
- In addition to your HSA contributions, you are able to set aside additional LPFSA tax-free contributions, up to $2,850 in 2022.
- Preserve HSA funds for other purposes, like investing or saving for retirement.
- Money contributed to a limited-purpose FSA is tax-free when it’s spent on eligible dental, vision, and orthodontia expenses, including dental exams, x-rays, vison exams, and much more.
