A Limited Purpose Flexible Spending Account is a type of plan usually offered with an HSA. It is similar to a regular Health FSA, but it limits the expenses that are reimbursable to comply with HSA requirements. Although a Health LPFSA account can only be used to pay for dental and vision expenses not covered by your insurance plan, it can still provide you with a significant tax advantage. Careful planning is required to make the most of this type of account. Money deducted from your pay and deposited in your Health FSA must be used for expenses incurred during that year only. Money left in an account does not carry over to the next year, and it is not refundable to you at the end of the year. In other words - if you don't use it, you lose it!
For additional information, please see:
IRS Publication 969, "Health Savings Accounts and Other Tax-Favored Health Plans".
Note: Our Account-Based Plans are not currently available with all Blue Cross and Blue Shield of Alabama plans. Contact your employer to see if a Health LPFSA is a provided benefit.
For more information on LPFSAs administered by HealthEquity please visit HealthEquity LPFSA.
For more information regarding historical Preferred Blue LFSA Accounts, please visit Preferred LFSA.