An LPFSA is an employer-offered, tax-advantaged account for eligible dental and vision costs, funded with pretax dollars and designed to work alongside an HSA.
Only employees at workplaces offering LPFSAs could use one in 2026, and annual contributions were capped at $3.4K for the tax year.
LPFSA contributions lowered taxable income, but spending stayed limited to eligible dental and vision care, with most other medical expenses paid from an HSA.
Eligible uses included cleanings, fillings, exams, contacts, and glasses, and some plans also covered qualified medical expenses after insurance deductibles were met.
LPFSAs followed use-it-or-lose-it rules, but some employers offered either a $680 carryover in 2026 or a 2.5-mo grace period for remaining funds.
