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Limited Expense Health Care Flexible Spending Account

Link to 2008 FEHB website
  • For the 2006 Benefit Period, OPM will offer a Limited Expense Health Care Flexible Spending Account (LEX HCFSA) for employees in FEHB high deductible health plans (HDHP) with a health savings account (HSA).
  • The Limited Expense Health Care Flexible Spending Account (LEX HCFSA) will be for eligible dental and vision expenses only.
  • HSA enrollees are not eligible for general health care flexible spending accounts (HCFSA), according to Section 125 of the Internal Revenue Code.
  • However, employees can have both an HSA and a limited purpose HCFSA.
  • We will be implementing the dental and vision benefit programs at the end of 2006. With the LEX-HCFSA, HSA enrollees will be able to set aside pre-tax FSA dollars for dental and vision services in 2006, just as non-HSA enrollees can.
  • Because the LEX-HCFSA is only for HSA enrollees, the FEHB HDHP plan will be responsible for notifying enrollees that they are eligible to enroll in a LEX HCFSA.
  • OPM's FSAFEDS third party administrator (SHPS, Inc.) will administer the accounts.
  • Enrollment would take place by phone after the Open season ends on Decemeber 12, 2005. Enrollees would have 30 days after being notified by their FEHB plan to establish their LEX HCFSA by calling a special SHPS phone number.
  • Employees will not enroll in LEX HCFSA during the regular FSAFEDS Open Season and their effective date may not be January 1, but they will still be able to fully fund their LEX HCFSA up to $5,000. The effective date will be prospective based on when they contact SHPS to enroll.

Please note – The above information reflects a refinement in the procedures since the issuance of the CHCO memo and news release.  The election of a LEX HCFSA is not going to be tied to actually funding the HSA.  Enrollment in a HDHP is sufficient.