If you have a flexible spending account through work, there's a decent chance you're about to forfeit money you already earned.
Most FSA plans operate on a calendar year, and the deadline to spend down your balance lands in late December or, for some plans, mid-March.
Miss it, and the leftover cash goes back to your employer.
Here's the part that stings: the average employee forfeits somewhere between $100 and $500 a year, according to benefits industry estimates.
That's a grocery run, a tank of gas, or a chunk of a utility bill.
And unlike a 401(k), there's no rollover safety net unless your specific plan offers one.
Some employers offer a grace period, letting you spend last year's funds until March 15.
Others allow a carryover of a limited amount into the next year.
Your HR portal or benefits summary will tell you which camp you're in, but almost nobody reads it until December panic sets in.
Over-the-counter medications, bandages, menstrual products, sunscreen, contact lens solution, and first-aid kits all qualify.
So do prescription glasses, dental cleanings, therapy copays, and certain medical equipment.
Since 2020, menstrual products and OTC medicines no longer require a prescription to be reimbursed, which opened up a long list of everyday drugstore items.
Amazon, Walgreens, CVS, and Walmart all run FSA-eligible storefronts where items are pre-labeled.
The catch is that you usually need to pay with your FSA debit card, not a regular credit card, or you'll be stuck submitting receipts for manual reimbursement.
The bigger risk here isn't just losing money.
It's the scam economy that sprouted around it.
Every December, sketchy websites pop up promising to "convert" your FSA balance into gift cards or cash.
The IRS treats it as tax evasion, and you can lose your account entirely.
If a website offers to turn healthcare dollars into Amazon gift cards, walk away.
There's also a subtler trap: the use-it-or-lose-it pressure pushes people to buy things they don't need.
Stockpiling five years of ibuprofen in December isn't smart budgeting.
It's panic spending dressed up as thrift.
The goal is to use money you'd spend anyway, not to invent purchases.
If you're staring down a balance and the clock, the practical move is to schedule the appointments you've been putting off.
A dental cleaning, an eye exam, a therapy session.
Those are real needs that eat real dollars, and they beat buying random bandages you'll never open.
One more thing worth checking: dependent care FSAs follow similar deadlines but cover daycare, after-school programs, and summer camp.
If you have kids and a balance sitting there, that's often the biggest pile of money at risk.
The bottom line is that FSAs reward people who plan and punish people who don't.
Your employer isn't going to call and remind you.
The system is designed so the unclaimed money quietly stays with them.
Final Thoughts
Set a calendar reminder, log into your benefits portal this week, and treat the deadline like the bill it effectively is.