A limited purpose FSA exists to solve one specific IRS conflict: you cannot contribute to a health savings account and a general-purpose flexible spending account in the same year, because the FSA would count as other health coverage and disqualify the HSA. A limited purpose FSA, restricted to dental and vision expenses, is the narrow exception that lets both accounts coexist.
What changed in 2026
- Annual FSA contribution limits are adjusted for inflation each year, and the limited purpose version uses the same cap as a general FSA — verify the current-year number with your employer's plan documents.
- More employers are offering LPFSAs specifically to make HDHP-plus-HSA enrollment more attractive, since it lets employees keep pre-tax dental and vision budgeting without giving up the HSA.
- Some plans now extend limited purpose coverage to preventive care more broadly, not just dental and vision, depending on how the employer's plan document is written — check yours rather than assuming a standard scope.
What it actually covers
Dental cleanings, fillings, orthodontia, and most dental procedures; eyeglasses, contact lenses, eye exams, and vision correction surgery. It does not cover general medical copays, prescriptions unrelated to dental or vision, or over-the-counter medication the way a general FSA or your HSA would.
Why pair it with an HSA instead of just using the HSA
You could pay dental and vision costs directly from your HSA. The advantage of running them through a limited purpose FSA instead is that the FSA money is "spend it or (mostly) lose it," which nudges you to actually use it for known, predictable costs like a routine cleaning or new glasses — while your HSA balance keeps growing untouched for larger, less predictable medical costs or long-term investing.
| Account |
Covers |
Combine with HSA? |
Rollover |
| General purpose FSA |
Broad medical, dental, vision |
No |
Limited grace period/carryover |
| Limited purpose FSA |
Dental and vision only |
Yes |
Limited grace period/carryover |
| Dependent care FSA |
Childcare, eldercare |
Yes |
Limited grace period/carryover |
| HSA |
Broad medical, dental, vision |
— |
Full, indefinite |
Planning around use-it-or-lose-it
Unlike an HSA, FSA funds are generally forfeited if unused by the plan year deadline, though many employers allow either a short grace period or a small carryover into the next year — not both. Estimate known dental and vision costs (a cleaning, a set of contacts) conservatively rather than maximizing the contribution on a guess.
Enrolling and changing your election
You elect an amount during your employer's open enrollment, and that election is generally locked in for the plan year unless you have a qualifying life event — a new baby, a marriage, or a change in your spouse's coverage, for example. Because the limited purpose FSA only exists to preserve HSA eligibility, double-check during enrollment that you are actually being offered the limited purpose version and not a general purpose FSA by mistake, since payroll systems do not always label the two clearly and enrolling in the wrong one can retroactively disqualify your HSA contributions for the year.
FAQ
Can I switch from a limited purpose FSA to a general FSA mid-year?
Only with a qualifying life event, the same rule that governs most benefit elections outside open enrollment.
Does a limited purpose FSA affect my HSA contribution limit?
No, the two are independent. You can contribute the maximum to each simultaneously, up to their separate annual limits.
What happens to unused funds if I leave my job?
Depends on your plan — some allow a short runout period to submit claims for expenses incurred before your last day, but the balance itself is generally forfeited.
Is a limited purpose FSA worth it if I rarely have dental or vision costs?
Probably not — the pre-tax savings only help if you actually spend the funds, and unused balances are largely forfeited.
This is general information, not tax or insurance advice — confirm your specific plan's covered expenses and deadlines with your employer's benefits administrator.
Where to go next
Compare it against the childcare-focused account in dependent care FSA explained, see the full HSA eligible expenses list, and read HSA vs FSA for the bigger-picture comparison.