Start with the dental and vision care you expect to pay for yourself, then check when your LPFSA will reimburse it. Choosing an election you can use before its deadline matters more than contributing the maximum.
How does a limited purpose FSA work?
You elect an annual amount through your employer, and payroll deductions fund it before federal income and employment taxes. Your full election is available when your coverage starts, even before all the paycheck deductions have happened. IRS Publication 969 explains these health FSA mechanics.
The account pays eligible out-of-pocket dental and vision costs for you and qualifying family members. It can cover your share after dental or vision insurance pays; you do not have to be uninsured. For the broader account comparison, see HSA vs FSA.
What expenses can a limited purpose FSA pay for?
Common LPFSA expenses include dental treatment, eye exams, corrective lenses and vision-correction surgery. Some plans also include preventive or post-deductible medical coverage, explained below.
| Expense | What qualifies | What to keep or check |
|---|---|---|
| Dental exams, cleanings and X-rays | Preventive and diagnostic dental care | Itemized provider statement or insurance EOB |
| Fillings, root canals and extractions | Treatment of dental disease | Date of service and your unreimbursed cost |
| Crowns, bridges, dentures and implants | Restorative dental treatment | Provider description distinguishing treatment from cosmetic work |
| Braces and clear aligners | Orthodontic treatment | Treatment contract and your plan's payment rules |
| Eye exams | Vision examinations | Itemized statement showing the service |
| Prescription eyeglasses and sunglasses | Corrective lenses and frames | Prescription details and itemized purchase receipt |
| Contact lenses and solution | Corrective contacts and their care supplies | Itemized receipt |
| Reading glasses | Prescription or over-the-counter readers | Itemized receipt; OTC readers do not require a prescription |
| LASIK and other vision-correction surgery | Surgery to correct vision | Provider bill and any insurance EOB |
IRS Publication 502 establishes the dental and vision medical-expense categories. FSAFEDS also lists over-the-counter reading glasses and publishes a limited-expense list for its federal plan.
The restriction concerns the account's scope. A dental-and-vision-only LPFSA does not pay unrelated medical bills, such as a visit for a knee injury. A medically necessary expense can qualify for an HSA without fitting an LPFSA. A Letter of Medical Necessity does not change the benefits your plan offers.
Teeth whitening and dental work performed solely to improve appearance are outside the IRS medical-care definition. Dental or vision insurance premiums are also outside health FSA reimbursement rules, even though treatment copays can qualify. Publication 502 covers the cosmetic distinction; Publication 969 covers the premium exclusion.
Can you have an LPFSA and an HSA at the same time?
Yes. Limited-purpose coverage is compatible with HSA contributions when you meet the other HSA eligibility requirements. A general-purpose health FSA that can pay your ordinary medical expenses generally blocks new HSA contributions. Revenue Ruling 2004-45 explains the difference.
Check both spouses' benefits. If your spouse's general-purpose FSA can reimburse your medical expenses, that coverage can block your HSA contributions even when you have separate health insurance and never submit a claim to that FSA. The relevant question is what can cover you, not which debit card you use. FSAFEDS' family-coverage guidance illustrates why the spouse's account matters.
Paying planned dental and vision bills from the LPFSA leaves HSA dollars available for other qualified expenses or future use. You can reimburse the portion insurance leaves unpaid, but cannot reimburse the same dollars twice through an LPFSA, HSA or insurance.
What is a post-deductible LPFSA?
Some employers combine limited-purpose and post-deductible coverage. The account pays its permitted expenses initially, then can reimburse additional medical expenses incurred after the required deductible threshold is satisfied. IRS Notice 2005-86 recognizes the combination.
An ordinary dental-and-vision LPFSA does not automatically expand when you meet a deductible. The written plan must offer that feature. Under Revenue Ruling 2004-45, the post-deductible threshold must meet the applicable HSA minimum; it need not equal your health plan's full deductible. Confirm the threshold, proof required and covered expenses with your administrator.
HSA-permitted preventive care is another possible plan feature. Confirm coverage before treating a general medical purchase as an LPFSA expense.
What is the limited purpose FSA limit for 2026?
For a plan year beginning in 2026, the federal employee salary-reduction limit is $3,400. Your employer can set a lower election maximum. Revenue Procedure 2025-32, section 4.15 sets the current health FSA limit, which applies to LPFSAs too.
The limit applies per employee, not per household. If both spouses are eligible through their employers, each can make their own election. Employer contributions can add to this amount if you cannot take them as cash or another taxable benefit. Carryover does not use up the next election limit. Notice 2012-40 explains the per-employee rule. Our HSA and FSA contribution limits guide compares the accounts and years.
Does a limited purpose FSA roll over?
An LPFSA follows health FSA use-it-or-lose-it rules, with any flexibility your employer adopts. For a 2026 plan year, the optional carryover can be up to $680; your plan may allow less. A carryover does not reduce the following year's employee election limit. Revenue Procedure 2025-32 sets the current maximum.
A health FSA can instead offer a grace period of up to 2 months and 15 days to incur expenses. It cannot offer both a carryover and a grace period for the same health FSA. A separate run-out period is time to file claims for eligible expenses already incurred. IRS Notice 2013-71 distinguishes those rules.
Check the plan-year end and both deadlines; they are not necessarily December 31. Our FSA rollover guide explains the timing in detail.
How do you choose an LPFSA amount and use it?
Estimate predictable costs after insurance, such as a planned crown or new glasses. Confirm the timing for larger treatment plans before committing money.
- Check the benefit. Confirm your employer offers an LPFSA, your enrollment window and whether the plan includes post-deductible coverage.
- Estimate your share. Get treatment estimates and subtract insurance payments. Keep uncertain procedures out of your election until you know their timing.
- Choose the election. Compare your estimate with the limit and spending deadlines. Elections generally stay in place for the plan year; permitted midyear changes depend on the event and plan.
- Keep claim records. Save an itemized receipt or explanation of benefits showing the patient, service or item, date and amount. A card-payment slip alone may not substantiate the expense.
The service date generally determines when you incur a treatment expense, rather than when you pay a bill. Orthodontic payment arrangements can work differently: FSAFEDS, for example, provides specific orthodontia claim instructions. Use your own administrator's rules before paying for treatment that spans plan years.
