There are different kinds of FSAs, which are Health Care FSA, Limited Purpose FSA, and Dependent Care FSA. Though they are all flexible spending accounts, there are still several main differences in use as follows.

The coverage of eligible expenses

The method of funding

Contribution limits (2021)

  • Health Care FSA and Limited Purpose FSA: $2,750 per FSAs/LPFSAs, regardless of whether you have family members who benefit from the funds in that account.

  • Dependent Care FSA: If married and filing jointly, the maximum annual election is typically $5,000. If married and filing separately, the maximum annual election is typically $2,500 per spouse.

    Read more about contribution limits HERE

Access to Money

  • Health Care FSA and Limited Purpose FSA: An employee's yearly FSA allocation is available in full on the first day of the plan year, regardless of contributions to date.

  • Dependent Care FSA: An employee may only use the funds that are available in your account, not the entire election amount.

Special Rules

In general, we can find that Health Care FSA and Limited Purpose FSA are similar except for the coverage of eligible expenses while Dependent Care FSA is a completely different account compares to the others.

If you have any questions, please feel free to reach out to us via live-chat, email to support@twic.ai, or call us at 844-902-2902.

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