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Limited purpose FSA (LPFSA) through Justworks
In response to the Consolidated Appropriations Act of 2021 (i.e. the COVID-19 relief bill signed into law in December 2020) Jusworks will be amending our FSA plan to allow rollover of unused balances over $25 from 2020 into 2021.
For employees who meet the rollover requirements but are actively enrolled in a Health Savings Account (HSA), unused 2020 HCFSA funds will be moved into a LPFSA. This is due to the IRS limitation on usage of a HCFSA alongside an HSA under the same employer for a single plan year.
Justworks will not be offering LPFSA after December 2021 and only members who meet the rollover minimum balance requirements will have access to the LPFSA.
What is a limited purpose FSA (LPFSA)?
A LPFSA is a flexible spending account (FSA) that can only be used for expenses related to dental and vision. It functions just like a healthcare FSA but unlike a healthcare FSA it can be paired and used alongside a health savings account (HSA).
How does a LPFSA work?
LPFSA funds are deposited on a pre-tax basis where they remain in the account until your employee submits a claim for reimbursement. Once the claim has been processed and approved the funds will be deducted from the account and sent to the member via check or if the member has direct deposit set up in their Optum Financial account they will be sent via ACH.
What can members use their LPFSA funds for?
Eligible expenses include things like, dental and vision screening tests, dental crowns, glasses, dentures, dental x-rays, etc. For more examples of eligible expenses please see the attachment here.
Can LPFSAs cover expenses for partners and or dependents?
Yes, just like a healthcare FSA the limited purpose FSA can be used to cover expenses for spouses and dependents.
During what dates is the LPFSA effective?
Members will have access to their LPFSA for a full plan year. That means any expenses that are incurred between January 1st and December 31st while they are enrolled in the LPFSA are eligible for reimbursement.
When do the LPFSA funds expire? Do they roll over if they aren't used by December 31st?
The LPFSA funds expire at the end of the plan year, December 31st. Members will have until that date to incur any eligible expenses. After December 31st members will have until March 31st to submit any unsubmitted claims, after that date any unused funds will be forfeited.
What if a member leaves my company mid-year?
If a member leaves your company mid-year they will lose access to their LPFSA funds upon termination, just like an HCFSA.
Can LPFSA funds be used for expenses incurred before the LPFSA effective date?
No, any expenses that were incurred before the start of the plan year are not eligible for reimbursement under the LPFSA.
How long do members have to file a claim?
Members are able to file a claim against their LPFSA up until March 31st, 2022. After that, any unused funds in their LPFSA account will expire and be forfeited.
Can members have an LPFSA if they have an HSA?
Yes! LPFSAs were built to go hand in hand with an HSA.
If a spouse has an FSA, can members still have an LPFSA?
Yes, if a spouse is enrolled in an FSA or HSA the member is still eligible to enroll and utilize an LPFSA.
Where can members view their LPFSA enrollment and account information?
Members will be able to view their LPFSA enrollment and account information in Optum Financial's portal.