Do you have that perfect recipe to help celebrate Thanksgiving? As the holiday season approaches, many cook and put together a feast for their family, creating the perfect holiday meal, leaving everyone thankful, happy, and ready for the year to come. But what about building the perfect “recipe” for your employees’ pre-tax benefit account for the upcoming year? It is all about finding the right “ingredients.” There are many to choose from, but only a few work together to benefit each business and their needs. When a company decides to incorporate a Health Savings Account (HSA), finding that “secret ingredient” to maximize the tax savings benefit is key. What is that “secret ingredient?” A Limited Purpose FSA.
The BASE® Limited Purpose Flexible Spending Account (FSA) is a type of flexible spending account that is strictly for reimbursing eligible dental and vision care expenses. This type of plan is for employees who are enrolled in a high deductible health insurance plan and also utilizing a Health Savings Account (HSA).
Not many know about this “secret ingredient” and what it can be used for. With a Limited Purpose FSA an employee can use their pre-tax dollars to pay for qualified dental and vision expenses, such as:
- Dental cleanings
- Dental fillings
- Vision exams, contact lenses, contact lens solution/cleaner
- Prescription glasses
- Dental & vision preventative care
How does a Limited Purpose FSA pair with an HSA? These two benefits go together like turkey and stuffing! Employees cannot use their Limited Purpose FSA balance to pay for qualified medical expenses that are not dental or vision costs, but the employee CAN use their HSA balance to fill in the gaps and pay for those expenses. With both benefits mixed together, it can help to make out-of-pocket medical expenses taste better more affordable. Funding dental and vision expenses from the Limited Purpose FSA may allow employees to keep more savings in the HSA. Incorporating these benefits into a business means that employees don’t have to entirely give up the benefits of a Flexible Spending Account (FSA) when there is an HSA in place.
When mixed properly with an HSA, the Limited Purpose FSA can help top off that perfect “recipe” further reducing employee and employer taxes while allowing the employee to allocate HSA funds to other purposes. Let BASE® help you perfect your recipe for a winning employee benefits package and call 888.386.9680 before the holidays!