2013 Limited Purpose Health Care Flexible Spending Account (FSA)

If you enroll in the Purdue Choice Fund, you have access to two types of tax-advantaged accounts:

The health savings account.
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 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 2013 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

Don't forget that while dental and vision expenses are eligible for reimbursement under the health savings account and the limited purpose health care FSA, you cannot claim the same expenses under both accounts.

Limited purpose health care FSA at-a-glance

If you elect the Purdue Choice Fund, 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

Beginning in 2013, 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.

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

PayFlex processes all 2013 LPFSA claims for Purdue University. If you did not use your PayFlex Card when you paid for an eligible expense, you can submit a claim for reimbursement. You can do this online at HealthHub.com. If you want, you can have your reimbursement deposited directly into your checking or savings account. While online, enroll in direct deposit.

Reimbursement methods: