Vision care is something that many people overlook when planning healthcare coverage. While some insurance plans include vision, that's not always the case. When yours doesn't, you may have to pay out of pocket for eye exams, frames and other relevant expenses.

However, there is one way to save and prepare for costs as they come. We're talking about Limited Purpose flexible spending accounts (LPFSAs).

An LPFSA is a unique employer-sponsored savings account that lets you set aside pre-tax dollars for specific expenses. It's similar to a standard flexible spending account (FSA). Like an FSA, an LPFSA ties to your employment. You also have a finite time to spend what's in your LPFSA. So what makes a Limited Purpose FSA different from a standard FSA?

It's exclusively for dental and vision care. That means you can use your LPFSA for eye exams.

Opening an LPFSA

There are a few important eligibility requirements to open an LPFSA. First, your employer must offer it. Unlike a standard health savings account (HSA), you can't open one that follows you around for the rest of your life. An LPFSA is a common perk offered as part of benefits packages.

Another eligibility requirement is that you must have a high-deductible health plan (HDHP) and an HSA.

What an LPFSA Covers

Technically, you can already pay for eye exams if you have an HSA. Even if it's employer-funded, what counts as an eligible expense for HSAs is broad. But the benefit of having a Limited Purpose FSA is that you divert pre-tax funds to cover specific costs. It's another way to save. If your existing HDHP doesn't include vision and dental, LPFSAs are a fantastic way to pay those expenses.

An LPFSA covers both vision and dental exams. You can also use them to get eyeglasses, contact lenses, contact solutions and other related products. LPFSAs will even cover laser vision correction procedures.

All that said, you can't use your LPFSA for any other medical expense. It's exclusively for dental and vision. For everything else, you'll have to use your HSA.

Author Resource:-

Daniel Stewart has been helping people with their money management and personal finance with over 15 years’ experience in business finance. You can find his thoughts at health investment blog.