2014 and 2015 Limited Purpose Health Care Flexible Spending Account (FSA)
If you are enrolled in the Purdue Health Plan Plus HSA 1 or Purdue Health Plan Plus HSA 2, you have access to two types of tax-advantaged accounts:
- The corresponding year's health savings account: 2014 and 2015 HSA
- A limited purpose health care flexible spending account (FSA), a Purdue-sponsored medical reimbursement account. You may only use the limited purpose health care FSA for dental and vision expenses.
Both accounts reduce your taxable income and give you an opportunity to use your pre-tax dollars for health care costs.
You may contribute up to $2,500 per calendar year to a limited purpose health care FSA. The annual amount you choose to contribute is taken in equal installments from your regularly-scheduled pays on a pre-tax basis. If you are paid on an academic year (AY) schedule, your FSA deductions will be taken only from your September through April pays. You will not have an FSA deduction taken from any summer earnings you may have.
You may only submit FSA claims that you incur while you are participating in the FSA plan. For example, if you stop working at Purdue and end your FSA participation on June 30, claims for services through that date are eligible, but claims for service beginning July 1 are ineligible.
You may request reimbursement for your own eligible expenses as well as your spouse's, if you file a joint tax return. In addition, qualified medical expenses incurred by the following persons are eligible:
- All dependents you claim on your tax return.
- Any person you could have claimed as a dependent on your return except that:
- The person filed a joint return,
- The person had gross income of $3,700 or more, or
- You, or your spouse if filing jointly, could be claimed as a dependent on someone else's return.
- Your child under age 27 at the end of your tax year.
How the accounts work together
All eligible health care expenses – from medical and prescription drug to dental and vision – can be reimbursed from your health savings account. In addition, eligible dental or vision care expenses can be reimbursed from the limited purpose health care FSA, including:
- Contact lens solution
- Dental and vision coinsurance and copayments
- Dental and vision care expenses
- Dental or vision care services or expenses that are medically necessary, but not covered under your vision or dental plans
Limited purpose health care FSA at-a-glance
If you participate in the Purdue Health Plan Plus HSA 1 or Purdue Health Plan Plus HSA 2, you can only enroll in the limited purpose health care FSA, not the standard health care FSA.
The limited purpose health care FSA allows you to reimburse yourself for eligible dental and vision expenses.
Dental and vision expenses are also eligible under your health savings account, but you cannot claim the same expenses on both accounts.
You cannot submit medical, prescription drug, or over-the-counter medication expenses to your limited purpose health care FSA for reimbursement — those expenses are eligible only for reimbursement from your health savings account.
|If you have both an HSA and a limited purpose health care FSA…||Can you use your HSA?||Can you use your limited purpose health care FSA?|
|Medical expenses you incur, such as your deductible and coinsurance costs||Yes||No|
|Prescription drug expenses you incur||Yes||No|
|Over-the-counter (OTC) medication expenses||Yes, with doctor's prescription||No. Some over-the-counter medications for dental care and vision may be eligible for reimbursement.|
|Dental expenses, such as visits to the dentist and orthodontia (unreimbursed expenses only)||Yes||Yes|
|Vision expenses, such as eyeglasses and contact lenses. (Note that Vision Service Plan (VSP) coverage will continue without change. These would be expenses remaining out of your pocket after the VSP benefit is paid.)||Yes||Yes|
IRS limitations on flexible spending accounts
- Expenses reimbursed from an FSA cannot be claimed as a medical expense on your tax return.
- Only expenses actually incurred during the calendar year are eligible for reimbursement. Expenses incurred before or after the eligibility period are not eligible, regardless of when you paid for the expenses. FSAs may not reimburse for future or projected expenses.
- If you do not use all the pre-tax dollars in your flexible spending account, you forfeit the amount left over. That's an Internal Revenue Service requirement.
How to get reimbursed
For 2014: Eligible 2014 LPFSA expenses may be incurred between Jan. 1 – Dec. 31, 2014. You have until March 31, 2015, to submit your claims for reimbursement. Any funds remaining in your account after March 31, 2015, will be forfeited, so it is important to estimate your expenses carefully.
For 2015: Eligible 2015 LPFSA expenses may be incurred between Jan. 1 – Dec. 31, 2015. You have until March 31, 2016, to submit your claims for reimbursement. Any funds remaining in your account after March 31, 2016, will be forfeited, so it is important to estimate your expenses carefully.
PayFlex Debit Card: PayFlex sends out letters on a quarterly basis requesting needed substantiation for all payments made through the PayFlex debit card. If you don’t provide required documentation to prove your debit card purchase was for an eligible LPFSA expense, the amount of the transaction will be added to your W-2 as taxable income, in keeping with instructions from the IRS.
PayFlex processes all LPFSA claims for Purdue University. You have three ways to file your LPFSA claims. If you wish to have your reimbursement deposited directly into your checking or savings account, enroll in direct deposit through the HealthHub website listed below.
Three ways to file a LPFSA claim:
- Online: Log in to HealthHub and go to File a Claim
- Fax: 866-932-2567
- Mail: PayFlex Systems USA, Inc., P.O. Box 3039, Omaha, NE 68103-3039
- PayFlex forms, educational materials, product highlights and planning tools (see My HealthHub Resources)