Millions of American workers are about to forfeit money they already earned, and most won't notice until it's gone.
Flexible spending accounts tied to 2024 payroll elections typically require you to spend the balance by December 31 — or hand it back to your employer.
The average forfeited amount runs a few hundred dollars per person, according to benefits industry surveys, which means the collective loss climbs into the hundreds of millions annually.
Here's the part that trips people up: a "grace period" and a "runout period" are not the same thing, and not every plan offers either.
Some employers allow until March 15 to spend leftover funds.
Others give extra weeks after year-end only to file claims for purchases already made.
Many plans offer neither, and the deadline is simply December 31.
So the first move isn't shopping — it's reading your plan documents or logging into your benefits portal.
Search for the words "grace period," "carryover," and "runout." Since 2013, employers have been allowed to let workers roll over up to $640 into the next plan year (the cap is indexed and adjusts most years), but they aren't required to.
If your plan permits it, that money follows you.
What actually counts as an eligible expense has widened over the years, thanks to legislation that made over-the-counter medicines reimbursable without a prescription.
That means the pharmacy aisle is suddenly full of legitimate ways to zero out a balance: pain relievers, cold medicine, allergy tablets, bandages, contact lens solution, thermometers, first aid kits, and menstrual products.
Beyond the drugstore, FSA dollars can cover prescription glasses and sunglasses, dental cleanings and fillings, co-pays, hearing aids, and even some medical equipment.
Dependent care FSAs are a separate bucket with their own rules, often usable for day care, after-school programs, and summer camp — and those deadlines can differ from the health account.
Two cautions before you sprint to checkout.
First, buying eligible items as gifts for other people generally doesn't qualify — the expense has to be for you, your spouse, or your tax dependents.
Administrators can and do audit claims, and a denied reimbursement after December 31 leaves you with neither the money nor the merchandise.
If you still can't spend the balance, a few employers let you donate it to a charitable fund, and some plans reimburse certain wellness purchases.
Neither is universal, so confirm before assuming.
The bigger picture is that FSAs remain a use-it-or-lose-it gamble by design.
You save on taxes upfront, but you're betting you can predict your family's medical needs a year in advance.
If your employer offers a carryover, the math gets less punishing.
If it doesn't, the deadline is less a suggestion and more a countdown timer on your own paycheck.
Our take: treat the December deadline like a bill, not a to-do list item.
Final Thoughts
Log in this week, check your exact rules, and spend strategically on things you'll genuinely use — because the only thing worse than paying for healthcare is paying for it twice, once in payroll deductions and again in forfeited dollars.