If you have a flexible spending account through work, there is a decent chance several hundred dollars sitting in it will vanish in the next few weeks.
It is the actual rule for most of these accounts.
Here is the part almost nobody explains at open enrollment: when you fail to spend the balance by the plan's deadline, the money does not roll into a rainy-day fund for you.
Companies are allowed to use forfeited FSA dollars to offset the cost of administering the plan, and some pocket the difference.
Some plans run on the calendar year and cut off December 31.
Others follow a fiscal year ending June 30, which is why you may be seeing "FSA deadline" warnings right now in the middle of summer.
Many plans offer a grace period of up to two and a half months, or let you carry over a limited amount, but those rules vary by employer and are not guaranteed.
A 2023 study in the Journal of the American Medical Association found that employees forfeited roughly $300 million in FSA funds in a single year at just two large firms.
Workers who forfeit tend to be lower-income and less likely to have the time or the paperwork savvy to chase receipts.
Employers, and the benefits administrators they hire to run these accounts.
The system is not designed to defraud you, but it is absolutely designed to make forgetting easy and spending hard.
You have to predict your medical costs a year in advance, then submit documentation for every purchase.
There is a real fix in the works, but do not hold your breath.
A provision in the 2022 SECURE 2.0 law lets employers offer a carryover into a health savings account starting in 2024, but it is optional.
Until that changes, the burden stays on you.
What you can actually do before the deadline: log into your FSA portal today and check the exact cutoff date, not the one you remember from orientation.
Over-the-counter medicines, menstrual products, sunscreen, bandages, contact lens solution, and first-aid kits all count now thanks to looser rules passed during the pandemic.
So do prescription glasses, dental work, therapy copays, and even some travel-size items.
You can also book appointments now and pay later, as long as the service happens before the deadline.
Eye exams, dental cleanings, and physical therapy sessions are common ways people burn a balance fast.
If you are close but not quite there, a new pair of prescription sunglasses is an easy, legitimate spend.
One warning: do not buy random stuff just to avoid forfeiting.
You still have to submit receipts, and administrators reject vague claims.
Spending $200 on eligible items you will never use is not a win over losing $200 to your employer.
Set a calendar reminder for two weeks before your deadline.
Claims take time to process, and a rejected receipt with 48 hours to go is a stress you can avoid.
The uncomfortable truth is that FSAs shift the risk of guessing wrong onto workers while employers collect the leftovers.
Final Thoughts
Until the rules change, the only reliable defense is a reminder on your phone and 20 minutes in the portal.