What Can an HSA Cover That an LPFA Can't? Explained

Health Savings Accounts (HSAs) and Limited Purpose Flexible Spending Accounts (LPFSAs) are popular healthcare financing options that offer tax advantages to individuals. However, there are differences between the two in terms of what they can cover. Let's delve into what an HSA can cover that an LPFSA can't to help you make informed decisions about your healthcare savings.

Differences Between HSA and LPFSA:

• HSAs:
• HSAs are compatible with High Deductible Health Plans (HDHPs) and can be used to pay for a wide range of medical expenses.
• Contributions to HSAs are tax-deductible, withdrawals for qualified medical expenses are tax-free, and any unused funds roll over year after year.
• HSAs have a higher annual contribution limit compared to LPFSAs.
• LPFSAs:
• LPFSAs are designed to cover specific expenses like vision and dental care, making them limited in scope compared to HSAs.
• Contributions to LPFSAs are also tax-free; however, any unused funds typically do not roll over at the end of the plan year.
• LPFSAs have lower contribution limits compared to HSAs.

What Can an HSA Cover That an LPFSA Can't?

Here are some key expenses that an HSA can cover that an LPFSA typically cannot:

• Prescription medications
• General medical supplies
• Preventive care services
• Mental health services
• Chiropractic care
• Surgeries and hospital stays
• Long-term care insurance premiums

By utilizing an HSA, you have the flexibility to manage a wider range of healthcare expenses compared to an LPFSA, providing greater control over your healthcare needs.

Health Savings Accounts (HSAs) provide not only tax advantages but also the peace of mind you need when facing unexpected medical expenses. Unlike Limited Purpose Flexible Spending Accounts (LPFSAs), HSAs are versatile and allow for a broader range of healthcare expenditures.