Limited Purpose FSA

The Limited Purpose FSA allows you to set aside money from your paycheck on a pretax basis to pay for out-of-pocket dental and vision costs (See eligible expenses). The exception to this is when your earnings are from an after tax source, such as a stipend. In that case your Limited Purpose FSA deductions will be made on an after tax basis, not a pre-tax basis. You can use your Limited Purpose FSA to pay dental and vision expenses for you, your spouse, or your qualified tax dependents, even if they are not enrolled in your PEBB medical or dental plan.

It is intended for employees enrolled in a consumer-directed health plan (CDHP) with a health savings account (HSA). By providing pretax funds for dental and vision expenses, it allows you to further reduce taxable salary and save more of your HSA funds for medical expenses. If you are not enrolled in a CDHP, the Medical FSA may be a better fit for you.

You cannot enroll in a Limited Purpose FSA and a Medical FSA in the same year.

How do I enroll?

You can set up a Limited Purpose FSA account:

  1. No later than 31 days after the date you become eligible for PEBB benefits.
  2. During annual open enrollment in Workday.
  3. No later than 60 days after you or an eligible family member has a qualifying event that creates a special open enrollment.

You must enroll in a Limited Purpose FSA for each plan year you want to participate. Your enrollment does not automatically continue year to year. If you want to enroll, make sure to choose this benefit again during each open enrollment.

How much can I contribute?

You can contribute a minimum annual amount of $120, up to a maximum annual amount of $3,050 in 2024.

To figure out how much you want to contribute, estimate your dental and vision expenses for the plan year (January 1 through December 31) and enroll in a Limited Purpose FSA for that amount. Divide that amount by the number of paychecks you will receive that year to find out how much will be deducted each pay period.

For more help, use the Navia Benefit Solutions Tax Savings Calculator.

How do I submit claims?

When you incur an eligible expense, you can submit a claim online, use the mobile app, or send a claim form by fax, mail, or email to request reimbursement. You also can sign up for a debit card.

You can begin submitting reimbursement claims for eligible expenses on or after the first day of your plan year, January 1. The full amount you set aside for your Limited Purpose FSA contribution is available on the first day of the plan year for expenses. You may submit claims for services as often as you like, but not until after the services have been provided.

You have from January 1 through December 31 to use your Limited Purpose FSA funds.

If you have not spent all the funds in your FSA by December 31, and you are still employed and didn’t lose eligibility for the FSA, you may have certain unspent funds “carry over” into the following year without affecting annual maximums.

To be eligible for the automatic carryover:

  • You must enroll in either the Limited Purpose FSA or Medical FSA for the following year, or
  • Have at least $120 left in your FSA balance.

Unused funds up to $610 will carryover to the next plan year. Any funds above $610 will be forfeited.

What happens to my funds when coverage ends?

When your PEBB insurance coverage ends or you go on unpaid leave that is not approved under the Family and Medical Leave Act (FMLA) or military leave, you are no longer eligible to contribute to your Limited Purpose FSA. Eligibility ends on the last day of the month of loss of coverage or unapproved leave.

You will be able to claim expenses incurred while employed, only up to your available funds, unless you are eligible to continue your Limited Purpose FSA coverage under PEBB Continuation Coverage (COBRA) or PEBB Continuation Coverage (Unpaid Leave), through Navia Benefit Solutions.