General Purpose (aka Medical) FSAs help employees pay for eligible medical, dental and vision expenses their insurance plans don’t cover. Unlike HSAs, FSAs don’t need to be paired with a specific health insurance plan, which is good news as employees have more freedom to choose the health plan that works for them.
Limited Purpose FSAs can only be used for dental and vision expenses that employees’ health plans don’t cover. The rules for these accounts are similar (but not exactly the same) as the General Purpose FSAs. One of the major benefits of this FSA? You can contribute to a Limited Purpose FSA and a health savings account (HSA) at the same time with no penalties.
Dependent Care FSAs are offered by employers to help employees save and pay for child and dependent care. It's meant to help employees pay for services that allow them to work when they would otherwise need to be at home fulfilling caretaking duties.Updated: