Money left in your health care flexible spending account (FSA) after the plan’s deadline is lost, so look up the date now. Some plans add a grace period or a small carryover, and some offer neither. Then spend the balance on care and supplies you’d pay for anyway, from an eye exam to cold medicine.
Every dollar in that account is pay you already earned, set aside untaxed in an amount you chose at enrollment. Letting the deadline pass means losing your own wages.
Start by finding the real deadline, which isn’t always December 31. Your employer sets the plan year and often lines it up with the health plan or the company’s fiscal year instead of the calendar. After the year ends, a plan can give you up to two and a half extra months to spend it, or let a limited amount carry over into the next year. It can offer one of those, never both, and it doesn’t have to offer either. A plan can also allow extra time after the deadline to file receipts for what you already bought. Your benefits portal or plan summary lists every date.
Then spend the balance, which covers far more than copays. Since 2020, over-the-counter medicine has qualified without a prescription. Eligible expenses include:
- Prescriptions, copays, and deductibles
- Pain relievers, allergy pills, cold medicine, and menstrual products
- Eye exams, prescription glasses, contact lenses, and contact solution
- Dental work such as cleanings and fillings
- Supplies and equipment like bandages, crutches, and blood sugar test kits
Say it’s November, $350 is still sitting in the account, and your plan has no grace period. Book the eye exam you’ve been putting off and put the rest toward new glasses, or stock the medicine cabinet for winter. Keep every receipt.
A health savings account works differently, because its balance rolls over from year to year. An FSA always has a deadline, so put yours on the calendar today with a reminder a month ahead.
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