What is a Limited Purpose Flexible Spending Account?
A Limited Purpose Flexible Spending Account (LPFSA) is a type of benefit account that lets you use pre-tax dollars to pay for eligible expenses for you, your spouse, and your eligible dependents. It’s much like a typical Healthcare FSA; however, you may only use LPFSA funds to pay for qualifying dental and vision expenses.Who is eligible to have both a HSA and LPFSA?
A LPFSA covers qualified expenses for dental and/or vision care provided to your, your spouse, or qualified dependents. Typical eligible expenses include: Dental Vision Cleanings Contact lenses Fillings Eyeglasses Crowns Eye exams Braces Vision correction proceduresWhen can an expense be reimbursed by more than one source?
Never. Expenses reimbursed under you LPFSA cannot be reimbursed under any other plan or program, including an HSA. Only eligible out of pocket expenses may be reimbursed. In addition, expenses reimbursed under an LPFSA may not be deducted when you file your tax return.What time frame should expenses incur to be considered eligible?
LPFSAs, just like FSAs, have a start date and an end date, and the time in between is called the plan year. Expenses must be incurred during the LPFSA plan year. As noted in IRS guidelines, expenses are considered incurred on the date when the vision or dental care service was provided, not when you are formally billed or when you pay for the service.How much money is available during the plan year?
Your LPFSA is funded through your employer. During your employer's Open Enrollment period, you notify your employer how much you would like to contribute to your account for the coming year. The maximum amount you can contribute is determined by the IRS. For 2019, it is $2,700. Your employer then deducts your contribution amount (in equal portions) from your paychecks throughout the plan year. And the good news - you don't have to wait for funds to build up in your LPFSA! Your entire annual election amount is available to you on the first day of your plan year. If your plan utilizes the carryover feature funds carried over from the previous plan year (up to $500) do not count toward your maximum annual contribution limit, so you could have a balance of up to $3,200.What happens to my LPFSA funds at the end of the year?
It depends on the type of LPFSA program your employer has in place. There are three scenarios for funds that are left unspent in your account at the end of the plan year:What happens to my LPFSA funds when I leave my employer?
- If you have a LPFSA with Carryover, you can carry over up to $500 into the next plan year.
- If you have a LPFSA with Grace Period, you have up to 2½ months after the end of the plan year to use unspent funds before you lose them.
- If you have a standard LPFSA, you lose any unspent funds at the end of the plan year.
Unfortunately, there is no universal answer to this question, because it depends on your employer's Healthcare LPFSA program. Often employers offer an extended grace period when claims can still be submitted to spend down the remaining funds in your Healthcare LPFSA. You may also be able to extend the time to use your Healthcare LPFSA funds if you elect COBRA after you leave your job. Keep in mind that you need to incur all eligible expenses before your last day of work. Please contact your employer for the options available to you.How do I get paid back for expenses I pay for directly?
There are two ways to submit a receipt for reimbursement:What do I need to submit for supporting documentation for my reimbursement?
- Through the Health Benefit Solutions mobile app. Use your mobile device to snap a photo of your receipts and submit them for reimbursement.
- Through your Health Benefit Solutions online account.
An itemized receipt or bill of service with the provider name, the patient’s name, a description of the service, the date(s) of service, and dollar amount.