Limited Purpose Health Care Flexible Spending Account

If you enroll in the Consumer Choice PPO Plan with Health Savings Account, you can participate in the Limited Purpose Health Flexible Spending Account. This pre-tax feature allows you to save up to the IRS limit in your Health Savings Account while contributing up to $2,500 (pre-tax) per calendar year for non-medical reimbursable expenses such as dental or vision charges not covered under a group plan.

 

Qualified expenses eligible for reimbursement with a Limited Purpose Health Care FSA include:

• Dental and vision deductibles and copayments not covered by insurance
• Eyeglasses and contact lenses
• Your portion of orthodontia expenses

Note: You may have a medical expense for a child that is not reimbursable under the Limited Purpose Health FSA even though such child is covered under the Medical Plan. 

 

Claims Filing Deadline

Claims must be submitted within 12 months from the date of service for medical and dental and 6 months for vision to be considered.  The claims filing deadline for the Health Care Flexible Spending Account (FSA), Dependent Care Flexible Spending Account (FSA), Limited Purpose Health Flexible Spending Account (FSA) is March 31 of the following calendar year for dates of service in the previous calendar year.

 

Flexible Spending Accounts – Claims Substantiation Requirement

Flexible Spending Accounts (FSAs) reimbursements require substantiation to the vendor (PayFlex) from the participant. This is an IRS requirement that vendors are required to follow. Reimbursements from FSAs must be accompanied by the appropriate documentation, typically in the form of a receipt and / or explanation of benefits (EOB). The documentation must indicate whether it is a qualified expense. In many cases, claims provided by the insurance company (BCBSIL or Delta Dental) contain the appropriate information needed. However, in many situations account holders may need to submit additional documentation.

 

Important Tax Information

If you are reimbursed for an expense through your Flexible Spending Account, you cannot claim that expense as a deduction on your federal income tax return.

 

Important Reimbursement Requirements for children over the age of 18 – General Purpose or Limited Purpose Health FSA

While adult children who are younger than age 26 may be enrolled in the Medical Plan even if they do not qualify as your tax dependent, the rules are not changes for the Health FSA. An expense that is incurred to provide medical care for your adult child cannot be reimbursed from the Health FSA unless your child also qualifies as your tax dependent.

Consequently, if you have children who are age 19 or older, but younger than age 26 (and the child is not disabled), please bear in mind that, as a general rule, expenses incurred for their medical care will not be eligible for reimbursement under your Health FSA unless each of the following requirements is satisfied:

 

1. The child will be under the age of 24 at the end of the calendar year; and
2. The child is a full-time student; and
3. The child resides with you for more than one-half of the calendar year (not including “temporary absences” due to special circumstances, such as education); and
4. The child does not provide more than one-half of his/her own support.

 

The dependent rules can be complicated and special rules can apply in particular situations. This information is merely to help clarify that not all adult dependents covered under the Medical Plan may have their unpaid medical expenses reimbursed by the Health FSA.