LIMITED-PURPOSE FSA SEE THE TAX SAVINGS AND SMILE. If you open and contribute money to a health savings account, or HSA, you can save even more tax dollars when you add a limited-purpose ﬂexible spending account. e limited-purpose ﬂexible spending account, or FSA, lets you set aside money, before taxes, to pay or reimburse yourself for eligible dental and vision expenses . How the limited-purpose FSA works 1. Estimate your dental and vision expenses for the year. en decide how much money you want to set aside when you enroll. You must re-enroll each year even if you are not making any changes. Not sure how much to set aside in an FSA? Use the FSA Savings Calculator on welcometouhc.com to help ﬁgure it out. 2. Money will be set aside from each paycheck before federal, state, or Social Security taxes are taken out. e amount you save in taxes depends on how much you set aside and the percentage you usually pay for taxes. 3. As you pay for eligible dental and vision expenses, you can reimburse yourself from your FSA. Your FSA may come with Health Care Spending Card MasterCard, ® which makes it easy to pay from your FSA. There’s no need to write checks or submit claim forms. Why is it called limited purpose ? The federal government says that if you have a health plan that allows you to contribute to an HSA, you cannot enroll in a health care FSA. Instead, the government will allow you to enroll in a limited-purpose FSA, which is limited to paying for certain eligible dental and vision expenses. FSA savings example Pete will save $593 Pete estimates that new eyeglasses and dental surgery will cost about $2,500. By setting this much aside, see how, his tax savings add up. Saved $625 Federal tax at 25% Saved $191 Federal tax at 7.65% Saved $125 Federal tax at 5% Total Savings $941 2 welcometouhc.com Hypothetical example is for illustration purposes only. Costs, circumstances and tax rates may vary.