There's a pile of your own money sitting in an account right now, and if you don't spend it soon, your employer gets to keep it.
It's not a scam or a hidden fee — it's the flexible spending account deadline, and millions of American workers miss it every year.
Roughly 35 million people have healthcare FSAs, and a chunk of them forfeit unused balances when the clock runs out.
The average forfeited amount runs into the hundreds of dollars per person.
For households already stretched by grocery bills and rent, that's real money evaporating.
Most FSA elections reset on a calendar-year basis, which means the money needs to be spent by December 31 — or, if your plan offers a grace period, by March 15 of the following year.
Some employers instead allow a carryover of a limited amount into the next year.
The IRS sets the ceiling on that carryover, and it adjusts for inflation most years, but it's still a fraction of what many workers set aside.
The trap is that FSA funds don't roll over the way an HSA does.
A health savings account is yours forever and can be invested.
An FSA is a use-it-or-lose-it arrangement, with the exception of whatever grace period or carryover your specific plan allows.
That difference matters enormously if you tend to overestimate your medical spending when you sign up during open enrollment.
So what actually counts as an eligible expense?
Prescription glasses, contact lenses, and sunglasses with a prescription.
Dental cleanings, fillings, and orthodontia.
Bandages, heating pads, blood pressure monitors, and dozens of over-the-counter items that became permanently eligible a few years back.
Even some travel costs for medical care qualify.
The fastest way to drain a balance is to stack up on things you'll use anyway.
If you wear contacts, buy a year's supply.
If you have a recurring prescription, refill early.
A dependent care FSA works differently — that money covers daycare, after-school programs, and summer camp, and it has its own separate deadline and rules.
Here's where people get burned: reimbursement isn't automatic.
You usually have to submit a claim with a receipt, and the deadline for filing claims often falls after the deadline for spending.
Miss the claim window and the money is gone even if you bought the eligible item in time.
Check your plan's specific dates — they vary by employer, and HR portals bury them.
One more thing worth knowing: if you're still deciding how much to set aside next year, underfunding slightly is usually safer than overfunding.
You lose nothing by paying a small expense out of pocket, but you lose everything you don't spend from an FSA.
Log into your benefits portal this week, find your exact balance and your exact deadline, and treat that money like a gift card with an expiration date.
Final Thoughts
A few minutes of scrolling through eligible expenses could easily save you a few hundred dollars — money you already earned.