As the end of the year approaches, many employees with flexible spending accounts (FSAs) are thinking about how to use their remaining funds.
With the December 31 “use-it-or-lose-it” deadline looming, it’s important to separate fact from fiction. FSA Store, the first online store dedicated exclusively to FSA-eligible products and services, shares 10 key facts every FSA user should know.
1. FSA Funds Do Expire
All FSAs have an annual spending deadline. Any money left in the account after that deadline is forfeited. Unlike FSAs, Health Savings Account (HSA) funds do not expire and roll over year to year.
2. December 31 is the Most Common FSA deadline
Most FSAs follow the calendar year, but this can vary depending on your employer. Always check with your HR team or FSA administrator to confirm your plan’s specific deadline.
3. Your Employer May Offer Extensions
Some employers provide ways to extend your FSA usage, such as:
Carryover: Up to $660 may be eligible to roll over from 2025 to 2026.
Grace period: An extra 2.5 months (usually until March 15) to use funds from the previous year.
Run-out period: A period (typically 90 days) after the plan year ends to submit claims for prior-year expenses.
Keep in mind that an FSA may have a carryover or a grace period, but not both, and that deadline extensions are completely optional.
4. Documentation May Be Required
Some FSA purchases require a Letter of Medical Necessity (LMN) from your doctor. To avoid delays or denied claims, use FSA Store’s comprehensive FSA Eligibility List™ and contact your FSA administrator if an LMN is needed.
5. FSA Funds Can Be Used for Gifts
You can use your FSA to buy healthcare products for yourself or qualified dependents (children up to age 26). From stocking stuffers to high-tech health devices, FSAs offer a way to invest in your family’s health.
6. Limited Purpose FSAs Follow the Same Deadline
If you have a Limited Purpose FSA, you can use it for vision and dental expenses, such as annual exams, glasses, contacts, and more. The December 31 deadline still applies.
7. The IRS Does Not Allow Stockpiling
Buying more than you will use of a single item in a plan year (like tampons or band-aids) may be considered stockpiling and is not permitted.
8. Shop Early To Ensure Your Purchase Counts
To qualify as a 2025 expense, purchases must be processed and hit your account by December 31. FSA Store processes transactions at the time of purchase to ensure funds are deducted from your 2025 balance.
9. There’s Still Time To Make a Plan
Check your FSA balance via your benefits portal or by contacting your administrator. Then, plan to submit claims for reimbursement or shop for FSA-eligible products and telehealth services to maximize your tax-free dollars.
10. Tax Savings Usually Outweigh Forfeiture
Data from VISA shows employees forfeited an average of $463 from their FSAs last year. Even if you do forfeit some funds, the tax savings can make the account worthwhile. For instance, contributing the maximum $3,300 in 2025 and forfeiting $463 would still result in approximately $990 in tax savings (depending on your bracket).
“Especially at this time of year, there is a lot of misinformation related to the FSA deadline and how these tax-advantaged accounts can be used,” said Rachel Rouleau, chief compliance officer for Health-E Commerce, parent brand to FSA Store. “It’s critical that account holders have reliable information and access to eligible products and telehealth services, and our team at FSA Store is proud to be that source of truth.”
Tips To Avoid Forfeiting FSA Funds
Check your balance: Access information through your employer, FSA administrator, or online portal.
Use FSA Store tools: Interactive deadline spending tools, product bundles, and price filters can help you align purchases with your remaining balance.
Use the FSA Eligibility List: Browse over 2,500 FSA-eligible products with guidance from trained FSA customer service representatives available 24/7 via chat or phone.
With a little planning, you can make the most of your FSA funds, enjoy tax savings, and treat your family to health-boosting products before the year ends.
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