Limited Purpose Flexible Spending Account (LPFSA) overview
The Limited Purpose Flexible Spending Account (LPFSA) is designed to support employees enrolled in both a High Deductible Health Plan (HDHP) and a Health Savings Account (HSA). This account allows employees to set aside pre-tax dollars specifically for eligible dental and vision expenses, complementing the HSA.
Contributions to the LPFSA
Employees can contribute up to $3,300 for the 2025 plan year, funded via pre-tax payroll deductions. While employer contributions to the LPFSA are optional, they’re also tax-advantaged for employees. Employees can access their LPFSA funds as they are deposited.
Eligible expenses
Since the LPFSA is limited to dental and vision care, eligible expenses typically include:
- Dental care: Routine cleanings, exams, fillings, crowns, and implants.
- Vision care: Eye exams, prescription glasses or contacts, and LASIK.
Level provides an intake form during onboarding for your selected plans, which include an exhaustive list of all eligible coverage categories as well as customizable plan design features for the selected plan. Reach out to your account manager or to success@level.com for more information.
Eligibility requirements
The LPFSA is available only to employees enrolled in an HDHP paired with an HSA, and have elected into the plan.
Explicit enrollment
Requires an enrollment file or manual action to specific details about new enrollments or enrollment changes.
Conversion to a Health FSA
An LPFSA may convert to a Health FSA in certain situations, such as:
- When an employee switches to a non-HSA-qualifying health plan.
- During open enrollment.
- After experiencing a qualifying life event.
Making purchases
Employees have two options for utilizing their LPFSA:
- Direct payment: Use the Level Card for direct payment at the point of service.
- Reimbursement: Submit claims via the Level App for out-of-pocket expenses.
Where can the Level Visa® Card be used?
Employees can use the Level card to make a co-payment at a dentist’s office, purchase eye prescriptions at the pharmacy, buy a new pair of glasses, and more.
- Employees can visit the sigis.org site for a list of merchants using the Inventory Information Approval System (IIAS) that automatically identifies eligible medical expenses.
- Employees will have a higher chance of automatic verification if you make your purchase at the pharmacy counter instead of the main checkout registers.
Year-end grace period
FSA funds are typically subject to a “use-it-or-lose-it” policy at the end of the year, meaning any remaining balance is forfeited unless the plan includes a grace period or a run-out period. Level provides an intake form during onboarding for your selected plans, which include an exhaustive list of all eligible coverage categories as well as customizable plan design features for the selected plan, including grace periods and run-out periods. Please feel free to reach out to your account manager or success@level.com to request our intake form for your review and plan configuration.
Termination
If an employee leaves the company, remaining LPFSA funds are managed according to IRS guidelines and company policy. Continuation options, such as COBRA, may allow departing employees to access unused LPFSA funds. The specific treatment may vary, so it’s essential to confirm the company’s stance and communicate it to departing employees if needed. All terminated employees will continue to have access to their Level account only to review past transactions and expenses.
The Level Visa® Card is issued by The Bancorp Bank, N.A., pursuant to a license from Visa U.S.A Inc. Card usage restrictions apply.