What is an "eligible expense" under the limited health care FSA?
While meeting the deductible of your High Deductible Health Plan (HDHP), eligible expenses for a limited health care FSA are for vision, dental and preventive care. Examples of common out-of-pocket expenses covered by a limited FSA include eye care, such as exams, LASIK surgery, eyeglasses and contact lenses for vision correction, and saline solution; orthodontia and dental work; preventive screenings and periodic health evaluations; prescription medicine for preventive care; and over-the-counter items for dental, vision and preventive care.

Once you meet the deductible of your HDHP and if your plan allows it, your limited FSA becomes a post-deductible FSA. A post-deductible FSA pays all FSA-eligible expenses, just like a traditional health care FSA. You are encouraged to consult a tax advisor or IRS Publication 969, which provides guidance on the types of expenses that can be reimbursed from a limited FSA. To access Publication 969, visit the IRS website at www.irs.gov/formspubs/index.html.

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What is the purpose of a limited FSA?
A limited FSA is a tax-favored plan that is "permitted other coverage" for health savings account (HSA) eligibility. A limited FSA can only reimburse for dental, vision and preventive care expenses while meeting the deductible of the high deductible health plan (HDHP).

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