What Is a Limited Purpose FSA, and Why Should I Care?
If you have a Health Savings Account (HSA), you might think you can't have a Flexible Spending Account (FSA) too. With a regular FSA, that's true. But there's a special kind of FSA that works side by side with an HSA. It's called a Limited Purpose FSA.
What is it?
A Limited Purpose FSA is an FSA that only pays for dental and vision costs. Things like:
Dental cleanings, fillings and braces
Eye exams
Glasses and contact lenses
Some eye surgeries, like LASIK
Some plans also pay for medical costs after you meet your deductible. Check your plan to see what yours covers.
Why does it exist?
The rules say you can't add to an HSA if you have other health coverage, and a regular FSA counts. But a Limited Purpose FSA only covers dental and vision, so it doesn't break the rule.
That means you can use both accounts at once.
Why should you care?
Using both accounts helps you save more on taxes and keep your HSA growing. Here's a simple plan:
Use your Limited Purpose FSA for dental and vision costs you know are coming.
Leave more money in your HSA so it can keep growing for the future.
Your FSA covers the predictable stuff. Your HSA becomes your long-term savings.
How it works
It works just like a regular FSA:
You pick an amount during open enrollment. For 2026, the limit is $3,400.
The money comes out of your paycheck before taxes.
Your full amount is usually ready on day one.
It's "use it or lose it," so plan carefully.
Meet Chloe
Chloe has an HDHP and an HSA. This year, her daughter needs braces, and Chloe needs new glasses. That's about $2,500 in dental and vision costs.
Chloe puts $2,500 in a Limited Purpose FSA to cover them. She still puts money in her HSA too. Instead of draining her HSA on braces, she keeps that money invested for later.
Is it right for you?
A Limited Purpose FSA might be a good fit if you:
Have an HSA
Have dental or vision costs you can plan for
Want to keep more money growing in your HSA
It's also a great fix if your spouse has an HSA. If you switch from a regular FSA to a Limited Purpose FSA, your spouse can keep adding to their HSA.
Key takeaways
A Limited Purpose FSA pays for dental and vision costs.
Unlike a regular FSA, you can have one at the same time as an HSA.
Use it for planned dental and vision costs, and let your HSA keep growing.
