Accounts
Limited Purpose FSA
A pre-tax FSA restricted to dental and vision — so it pairs with an HSA
Key takeaways
- Restricted to qualified dental and vision expenses, which is exactly what preserves HSA eligibility.
- Lets you contribute the full HSA maximum while still using pre-tax dollars for dental and vision.
- Follows the same limits and mechanics as a general Health Care FSA.
What it is
A pre-tax FSA restricted to dental and vision — so it pairs with an HSA. The account is a structure; the investments it holds are separate and carry their own risks.
How it works
- Elect an annual amount during open enrollment.
- Use it for dental and vision costs while your HSA continues to grow.
- Some plans convert it to full-purpose once the medical deductible is met.
Eligibility
Offered through an employer plan, typically alongside a high-deductible health plan and an HSA.
Contributions and funding
For 2026, the salary-reduction limit is $3,400, with a carryover of up to $680 where the plan permits.
What it can hold
Cash balances used to reimburse qualified dental and vision expenses.
Taxes and reporting
Contributions are excluded from gross income; qualified reimbursements are tax-free.
Withdrawals and distributions
Paid as reimbursement for eligible dental and vision expenses.
Risks and limitations
- Forfeiture of unused funds beyond any carryover
- Narrow eligible-expense list — medical costs generally do not qualify
- Election generally irrevocable mid-year
Frequently asked questions
Why not just use the HSA?
You can. Pairing them lets you preserve HSA dollars for long-term growth while paying near-term dental and vision costs pre-tax.
Does it affect my HSA limit?
No. That is the entire point of the limited-purpose design.
What counts as vision?
Exams, lenses, frames, contacts, and corrective surgery, among others.
Educational only. This page is general information, not individualized investment, legal, or tax advice. Rules depend on your account type, transaction, tax year, and circumstances — consult a qualified professional.