Limited Purpose FSAs work with qualified high deductible health plans (HDHPs) and Health Savings Accounts (HSAs) providing a way to pay for qualifying expenses with pre-tax dollars.
These accounts only allow reimbursement for vision and dental expenses. Please check with your employer to see what plans are offered.
What are the benefits of a Limited Purpose FSA?
- Enjoy potential tax savings with pre-tax deductible contributions and tax-free distributions used for qualified plan expenses.
- Quickly and easily access funds to pay for and manage expenses using our website or mobile app.
Using a Limited Purpose FSA along with your HSA is an innovative way to increase your tax benefits. Money is set aside from your paycheck before taxes are taken out, just like other standard healthcare plans. You can then use your pre-tax Limited Purpose FSA dollars to pay for eligible vision or dental expenses throughout the plan year. This way, you save money on expenses you’re already paying for, like dental checkups, vision exams, eyeglasses, and much more. The amount of your pay that goes into a Limited Purpose FSA will not count as taxable income, so you can have immediate tax savings.
Be sure to estimate your healthcare expenses carefully as money left unspent in your Limited Purpose FSA at the end of the year will be forfeited.
Why have an HSA and Limited Purpose FSA?
A Limited Purpose FSA reimburses you for your dental and vision expenses only. If you also have an HSA, those expenses will be deducted from the Limited Purpose FSA first and then the HSA will cover all other eligible healthcare expenses.
Limited Purpose FSAs are accounts offered by Voya Benefits Company, LLS (in New York, doing business as Voya BC, LLC) and administered by WEX Health, Inc.
The amount you save in taxes will vary depending on the amount you set aside in the account, your annual earnings, whether or not you pay Social Security taxes, the number of exemptions and deductions you claim on your tax return, your tax bracket and your state and local tax regulations. Check with your tax advisor for information on how your participation will affect your tax savings.
This page highlights some of the benefits of a Limited Purpose FSA. If there is a discrepancy between this material and your plan documents, the plan documents will govern. WEX Health, Inc. reserves the right to amend or modify the services at any time.