You've got FSA money sitting there, and the deadline is looming. It's the classic use-it-or-lose-it problem. Many plans now offer a grace period or some carryover, but the rules vary by employer, so don't assume yours does. Planning ahead is necessary if you want to keep those pre-tax dollars.
Where Unused FSA Money Goes
Whatever you don't spend by the deadline goes back to your employer, not back to you. That's the use-it-or-lose-it rule in action. The Employee Benefit Research Institute found that roughly half of FSA accountholders forfeited money in 2023, with an average forfeiture of $436. Deliberate spending before your deadline is the only reliable way to avoid that.
Understand Your Plan's Specific Rules
First things first: know your plan's exact rules. Log into your benefits portal or call HR to confirm three things: your plan year end date, the deadline for incurring expenses, and your claim submission deadline. Also check if you get a 2.5-month grace period (until March 15 of the next year, for a December 31 plan year) or can carry over up to $680 for 2026. Nice if you have it, but don't count on it.
Proactive Strategies to Use FSA Funds
Don't wait until November. Instead, spread your spending out:
- Mid-year check-in: Around June or July, look at your balance and what you've already submitted. Gives you plenty of time to plan for the rest of the year.
- Schedule appointments: Use your FSA for co-pays, deductibles, and eligible services. Think annual physicals, eye exams, dental cleanings, or that therapy session you've been putting off.
- Stock up on supplies: You can buy a year's supply of eligible items now. Basics like bandages, sunscreen (SPF 15+), contact lens solution, and menstrual care products are all fair game. Need a new thermometer or first-aid kit? Go for it.
- Consider bigger expenses: Got a large balance? Braces, LASIK, or new prescription glasses can eat up a lot of those funds fast, and they're good for your health.
Use the Tools Your Plan Gives You
Many benefits platforms, like the one behind WellthCare™, let you spend directly from a dedicated store. WellthCare is the first Health-to-Wealth™ Benefit System that turns everyday preventive actions into earnable store dollars at the WellthCare Store™, alongside automatic retirement contributions. The WellthCare Store carries FSA-approved, health-supporting products, so you can see at a glance which items qualify and put earned reward dollars toward them instead of spending down your FSA balance. These systems can also suggest items based on your specific health needs, making it easier to find useful, eligible products.
Don't Wait Until December: Key Deadlines
Mark these on your calendar:
- Last day to incur expenses: The final day you can receive a service or buy something. Often December 31, but double-check.
- Claims submission deadline: The last day to submit receipts for expenses you incurred during the plan year. Many plans give you a 90-day run-out period after the plan year ends, but your employer sets the length, so verify. Miss this and you lose the money.
What If You Still Have a Balance?
If you're down to the wire with funds left, don't panic. Look at the eligible expenses list again. Consider a quality blood pressure monitor, a premium first-aid kit, or stock up on over-the-counter medicines, which have been eligible without a prescription since 2020. Buy things you'll actually use, not junk to drain the account.
Understand your plan, plan ahead, and use the tools you have. You'll use your FSA money without stress, reduce your taxable income, and invest in your health, with no fear of losing those pre-tax dollars. A little planning turns year-end panic into a simple, even rewarding, part of managing your health and finances.