What is a Limited Expense FSA?

A Limited Expense Flexible Spending Account, also known as a "limited purpose FSA" is another type of pretax health account.

Only certain medical expenses are covered through a Limited Expense FSA unlike with a regular Health Care FSA. You are also allowed to enroll in a limited expense FSA if you are already enrolled in a health savings account (HSA).

The Limited Expense FSA applies the same "use it or lose it" rule as the regular FSA does, so all funds must be used before the plan year ends. The maximum annual contribution is set to $2,700 for a Limited Care FSA for the 2020 plan year.

However, the contribution limit is on a per-person basis, so you and your spouse would both be able to elect $2,700. Check in with your employer about your plan's limits and consult your Summary Plan Description for additional information.

What qualifies for a Limited Expense FSA?

- Dental care

  • Examples: Braces, dental exams, fillings, crowns and cleanings.

- Vision Care

  • Examples: LASIK, multipurpose contact lens solutions, and eyeglasses.

- Preventive Care* could include:

    • Flu shots, child and adult immunizations.
    • Periodic health exams (annual physicals).
    • Tobacco cessation programs.
    • Weight-loss programs.
    • Certain screening devices and services.
    • Routine prenatal and well-child care.
    • Prescription OTC drugs (must be vision, dental or preventive).
  • FSA eligible products (must be vision, dental or preventive).

*Preventive care does not generally include services intended to treat existing illnesses or injuries. Preventive care applies in situations where it is unreasonable or impracticable to perform other procedures to treat a condition. Using medications is part of preventive care when people developed risk factors of a disease or prevent reoccurrences of a disease. For example, taking cholesterol-lowering medications to prevent heart disease.

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