Limited Purpose Flexible Spending Accounts

Key Takeaway

A limited purpose flexible spending account (FSA) allows employees covered by a health savings account (HSA) to pay for vision, dental, and orthodontic expenses with pre-tax dollars. Pre-tax means before state, federal, Social Security, and Medicare taxes are applied. If an employee and/or spouse is covered by an HSA, they cannot contribute to a traditional health FSA.

How It Works

Before each plan year, employees elect how much they would like to have taken out of their paycheck on a pre-tax basis. Contributions are deducted from each payroll. The amount contributed should be carefully considered, as unused amounts are generally forfeited at the end of the plan year.

As eligible expenses are incurred, employees submit claims to Alerus for reimbursement. Alerus is required to substantiate each claim by reviewing receipts, explanation of benefits, and/or claim forms to ensure expenses meet applicable regulations. Alerus reimburses employees by check or direct deposit. Your plan may also include a debit card for making purchases directly.

Important Facts

  • New elections are required each plan year.
  • Elections are irrevocable during the plan year unless there is a qualified change in status.
  • Spouses and children up to age 26 are eligible for reimbursement from a limited-purpose FSA.
  • For current limits, please check the Plan Design Checklist. Log in to your plan online¬†and click on Tools & Support.

Eligible Expenses

Vision, dental, and orthodontic expenses.

Supporting Documentation

Supporting documentation is required with all claims. Documentation should be itemized to show:

  • Provider of service
  • Date of service
  • Service being claimed
  • Amount you are responsible for paying

If the expense was covered by insurance the Explanation of Benefits from your insurance carrier must be included with your claim.

Expenses Ordered, Paid For, and/or Picked Up In Different Years

Occasionally an expense may be ordered and/or paid for before it is obtained, such as with eyeglasses. The service date listed on the itemized provider bill will determine which plan year the expense applies to.

Submitting Claims

You can submit claims online, through the Alerus Benefits mobile app, or by completing a Reimbursement Request Form. Always include documentation to support the expenses you are claiming. Claims cannot be paid until itemized documentation is submitted to and approved by Alerus.