There are several types of FSAs that you can decide to enroll in with your employer during the open enrollment period each year. Each of these accounts have their own specific criteria for eligible expenses that is determined by the IRS.
Health Care FSA (HFSA/HCFSA)
Health Care FSAs allow you to allocate specific funds towards health care expenses for you and your dependents. Eligible expenses here include medical costs such as co-pays, co-insurance, and pharmacy, dental and vision expenses, and select OTC healthcare items.
Limited Purpose FSA (LPFSA)
Limited Purpose FSAs are accounts that support specifically dental and vision care costs. The scope of eligible items here is more restricted than an HFSA, as we often see those who elect into this type of account use it in tandem with a Health Savings Account (HSA) as you are required to have a high deductible health plan (HDHP) to enroll. Eligible expenses here include dental cleaning, vision exams, contact lenses, glasses, or similar.
Dependent Care FSA (DCFSA/DFSA)
Dependent Care FSAs are pre-tax benefit accounts used to pay for eligible dependent care services, such as preschool, summer day camp, before or after school programs, and child or adult daycare.
Questions? We are happy to help! Please reach out to Benepass Support for any assistance.