Flexible spending accounts come with a cruel little catch that millions of American workers discover too late: if you don't spend the balance by the plan's deadline, the account administrator keeps it.
This year, the clock is running out for employees whose grace period or carryover window closes December 31.
Roughly 20 to 25 million Americans set money aside in health care FSAs each year, according to benefits industry estimates, and a meaningful slice of that cash gets forfeited annually.
The average worker elects somewhere between $1,500 and $2,000, and even a leftover $300 stings when you consider it was pulled from your paycheck before taxes.
The rules are stricter than most people assume.
Dependent care FSAs almost never allow a carryover, so any balance left unclaimed there is gone.
Health care FSAs give you two possible cushions: a carryover of up to $640 into next year (for 2025 plans), a grace period of up to 2.5 months, or neither—it depends entirely on what your employer chose.
Elapsed time won't get your money back once it's forfeited.
So here's the practical move: log into your FSA portal today, not on December 30, and check your balance and your plan's specific deadline.
Then scan your receipts from the past year—many items are reimbursable retroactively as long as you bought them while the plan was active.
What can you still buy before the buzzer?
Eligible expenses typically include prescription glasses and contacts, contact solution, first-aid kits, bandages, sunscreen with SPF 15 or higher, menstrual products, breast pumps, and over-the-counter medicines thanks to the CARES Act.
You can also stock up on eligible items sold at pharmacies and big-box retailers, though you can't use FSA funds on general groceries.
Don't overlook services you may have already paid for.
Dental cleanings, eye exams, therapy copays, and even some chiropractic visits count.
If you paid out of pocket earlier in the year, you can often submit those claims now and pull the reimbursement before the deadline.
One trap to avoid: buying stuff you'll never use just to drain the account.
An unused $80 pair of readers isn't a win just because you didn't forfeit the cash—you still spent real money.
Prioritize things you actually need in the next few months.
Also worth checking: whether your employer offers a run-out period.
Some plans let you submit claims for expenses incurred during the plan year for 90 days after it ends, even if you can't spend the card anymore.
That's different from a grace period, and it can rescue a balance you thought was lost.
The bottom line: this is one deadline where ignoring the email genuinely costs you.
Ten minutes in your FSA portal beats watching hundreds of dollars evaporate on January 1.
Final Thoughts
Set a reminder now, because nobody from HR is going to chase you down before the cutoff.