Limited Purpose Flexible Spending Account (LPFSA)

NOTE: 2021 Accounts may be impacted by current COVID-19-related legislation. See the HR COVID-19 Benefit Vendor Updates (or Announcements) page under "HSA/FSA/HRA" for more information.

Limited Purpose Flexible Spending Account(LPFSA)

A Limited Purpose Flexible Spending Account (LPFSA) is an employer-owned and funded account to which an employee may contribute pre-tax funds that may be used tax-free for eligible expenses incurred by the employee and their eligible dependents (e.g., spouse, child under age 26) during their LPFSA coverage period.  This is similar to the health care Flexible Spending Account (FSA), but is limited to eligible vision, and dental expenses only. 

You cannot submit medical, prescription drug, or over-the-counter medication expenses to your LPFSA for reimbursement — those expenses are eligible only for reimbursement from your Health Savings Account (HSA). The HSA also reimburses for eligible vision and dental expenses; however, you may not request reimbursement from both the HSA and your LPFSA for the same eligible expense.

FSA funds do not roll over from year to year — any unused funds remaining in the account following the end of the runout period (90 days following the termination of the account - usually 3/31) are forfeited.  The FSA coverage period, or the time in which the employee may incur eligible expenses, begins with the opening date of the FSA and ends when the FSA ends (typically 12/31).  If the accountholder loses benefits eligibility or leaves Purdue employment midyear, their FSA would terminate with that date and they would have 90 days after to file claims for reimbursement of expenses incurred up until that date.

Eligibility 

Employees who are participating in (receiving contributions to) an HSA with Purdue may enroll in an LPFSA.  You may also elect a Dependent Care FSA (DCFSA) with no impact to your LPFSA. 

Contributions

Purdue employees may contribute up to the IRS maximum of $3050 for the calendar year to an LPFSA.  This election cannot be changed outside of open enrollment.  The annual amount you choose to contribute is available to you on a debit card up front on January 1 and 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 LPFSA deduction taken from any summer earnings you may have.

Note: The maximum amount you may contribute to an LFSA at Purdue when making open enrollment elections is typically a year behind the IRS limits as new limits tend to be announced after the annual open enrollment period.

Account Management

You may manage your LPFSA (e.g., check your balance, reimburse yourself for eligible expenses paid out-of-pocket, pay a bill)  online at www.hsabank.com or on the HSA Bank mobile app.

Accessing your funds

You have multiple ways in which you can access your LPFSA funds — by swiping your HSA Bank debit card, by filing a claim to request reimbursement for an eligible expense paid out of pocket, and by submitting payment to your provider.

HSA Bank Debit Card

Some purchases made by HSA Bank debit card may be auto-substantiated if the provider or merchant uses an inventory information approval system (IIAS) which identifies eligible expenses (most commonly, pharmacies).  When a charge is not auto-substantiated, HSA Bank will reach out for documentation.  

See "HSA Bank Debit Card" on the HSA, HRA and FSA page for information and to learn how your card works when you have multiple HSA Bank accounts.

File a Claim

You may file a claim for an eligible expense paid out of pocket at www.hsabank.com or through the HSA Bank mobile app with yourself as the Payee.  Log in, click or tap "File a Claim," select your LPFSA, then follow the prompts to submit supporting documentation and enter the claim details.  Funds will be reimbursed via direct deposit (if you have enrolled in it with HSA Bank) or check.

(FSA/HRA) HSA Bank Reimbursement Account Claim Form (If you have more than one account, funds will be pulled based on account stacking order)

Substantiation

The IRS requires plan administrators to validate that your LPFSA funds are used only for eligible health care expenses; therefore, each of the above options requires substantiation or validation of the eligibility of the expense by means of supporting data or documentation.  If HSA Bank requests documentation from you, you will have 45 days to provide it.  If documentation is not provided, the amount of your unsubstantiated charge(s) will be reported back to you as taxable income the following year, in keeping with instructions from the IRS.

For more information on substantiation, read Tips for substantiating, or validating, your eligible expenses.

Verifying medical necessity

Expenses must be medically necessary to qualify for reimbursement. Some health care services and products for vision and dental may be for both medical and non-medical reasons; therefore, HSA Bank may request that your doctor confirm that the expense is a recommended treatment and is a direct result of a specific, diagnosed medical condition.

If HSA Bank requests confirmation, your doctor may complete a letter of medical necessity which you can submit to them.

Resources

• FSA Frequently Asked Questions
• HSA Bank Reimbursement Account Form (for FSAs and HRAs)
• High-level summary of eligible expenses (refer to vision and dental expenses only)
• Tips for substantiating, or validating, your eligible expense