What is a Limited-Purpose FSA?
The IRS allows employers that offer a High-Deductible Health Plan (HDHP) and Health Savings Account (HSA) to also offer a Limited-Purpose FSA. A Limited-Purpose FSA works the same way a Health Care FSA by letting you as an employee set aside pre-tax money on an annual basis to pay for qualified expenses incurred during that year. The difference is that it limits what expenses are eligible for reimbursement. In a Limited-Purpose FSA you can only submit claims for eligible vision and dental expenses. (Remember: Cosmetic procedures such as teeth bleaching are not eligible under any Flexible Spending Accounts.
