An Explanation of Post-Deductible Limited Purpose FSAs
Medical Flexible Spending Accounts with Health Savings Accounts (HSAs)
If you participate in a High Deductible Health Plan and open an HSA (Health Savings Account) you may still enroll in a “Limited Purpose” Medical Flexible Spending Account if offered by your employer.
- IRS rules require that the Limited Purpose Medical FSA is available for Vision, Dental and Preventive Care expenses only.
- Your HSA (Health Savings Account) dollars may also be used to cover vision, dental and preventive care services. Some participants may wish to allow their HSA money to accumulate for future healthcare needs and take advantage of the additional pre-tax dollars from the Limited Purpose Medical FSA to cover vision or dental expenses that are predictable for the current plan year.
- Be sure to complete the section of your flex account enrollment form that indicates “Limited Purpose” Medical flex account.
- GDI provides a Limited Purpose Reimbursement Request Form for your use with this type of Medical flex account.
- “Post-Deductible” expenses: After you have incurred the federally mandated amount of deductible expenses, the IRS permits you to use flex account dollars toward general medical expenses. The required amount for 2010 is $1200 if enrolled in a single health plan and $2400 if you are enrolled in your health plan as a family.
- You must submit an Explanation of Benefits (EOB) from your health insurance carrier which indicates that you have incurred the required deductible before GDI is able to reimburse a general medical expense from a Limited Purpose medical flex account.
- If your Limited Purpose flex account includes a debit card, the card will only work for dental and vision services. You will have to use the paper claim system for post-deductible medical and qualified preventive care claims.
- It is important to note that it is your responsibility as a participant in tax-exempt accounts (Medical FSA and HSA) to follow IRS regulations. GDI is in the process of developing internal tools to help ensure compliance.