A Limited Purpose Flexible Spending Account (LPFSA) is a specialized healthcare savings account employers offer. It complements a High Deductible Health Plan (HDHP) and a Health Savings Account (HSA).
The LPFSA will only pay medical or dental expenses for individuals with inactive health savings accounts. Unlike an FSA, there are two types, the LPFSA and the HSA.
In the next few slides, we have shared some Tips For Using A Limited Purpose FSA
Familiarize yourself with the list of qualified dental and vision expenses that your LPFSA can cover. This includes dental cleanings, orthodontics, vision exams, eyeglasses, and contact lenses.
Take the time to estimate your dental and vision expenses for the upcoming year. This will help you determine an appropriate contribution amount to your LPFSA.
Be aware of important deadlines related to your LPFSA. This includes the enrollment period, submission deadlines for reimbursement claims, and any grace period.
Keep track of your LPFSA contributions and consult with a tax professional to fully understand the tax benefits and how to maximize your savings.
Read the plan documents and stay updated on any changes or updates to your LPFSA. Understand the rules and regulations your employer and the Internal Revenue Service (IRS) set.