FSAs do not roll over — you lose any money you don't spend by the end of the plan year

Most Flexible Spending Accounts (FSAs) operate under a "use-it-or-lose-it" rule. This means that any balance remaining in your account on December 31st (or whenever your plan year ends) goes back to your employer. You cannot carry the money forward to the next year, and you cannot withdraw it as a refund.

The only exception is a small carryover amount that some employers choose to offer. A few plans allow you to roll over up to $610 (as of 2024) into the next plan year, but this is optional for employers and not automatic. You need to check your specific plan documents or ask your benefits administrator whether your employer offers this option.

This rule exists because FSAs are tax-advantaged accounts. The money you put in is pre-tax, which saves you money on taxes. In exchange, the IRS requires that you actually spend the money on may have access to medical expenses during the plan year — you cannot use it as a general savings account.

Key Takeaways

  • Any FSA balance you do not spend by December 31st is forfeited to your employer; there is no automatic rollover to the next year.
  • Some employers offer an optional carryover of up to $610 into the following plan year, but you must check your plan to see if yours does.
  • The use-it-or-lose-it rule exists because FSAs are tax-advantaged, and the IRS requires the money to be spent on may have access to medical expenses within the plan year.
  • You can request a grace period (usually 2.5 months into the next year) to spend remaining funds, but only if your employer's plan includes this feature.
  • Planning your FSA contributions carefully and tracking your spending throughout the year helps you avoid losing money.

How the use-it-or-lose-it rule works in practice

When your plan year ends, your FSA account closes. Any money left in it does not transfer to a savings account, does not roll into next year's FSA, and cannot be withdrawn. Your employer reclaims it. This happens automatically — you do not need to do anything, and there is no way to recover the money once the important date passes.

For example, if you contributed $2,500 to your FSA for 2024 and spent only $1,800 on may have access to medical expenses by December 31st, the remaining $700 is gone. You cannot use it in 2025, and you cannot ask for it back.

The only way to avoid losing money is to spend it before the plan year ends or to have a grace period built into your plan (see below). This is why it is important to estimate your medical expenses carefully when you enroll in an FSA.

Carryover and grace periods — the exceptions to use-it-or-lose-it

Your employer can choose to offer one of two options that soften the use-it-or-lose-it rule, but neither is required and neither is automatic.

A carryover allows you to roll up to $610 of unused FSA money into the next plan year. If your plan offers this, any balance under $610 on December 31st carries forward. Balances over $610 are still forfeited. Not all employers offer carryover, so you must check your plan documents or contact your benefits administrator to know whether yours does.

A grace period gives you extra time to spend your remaining FSA balance — usually 2.5 months into the next calendar year (so through mid-March if your plan year is the calendar year). During the grace period, you can still submit claims for expenses you incurred in the previous plan year. After the grace period ends, any remaining balance is forfeited. Some plans offer both carryover and a grace period; some offer one or the other; some offer neither.

How to find out what your plan offers

Your employer's benefits administrator or human resources department can tell you whether your FSA plan includes carryover, a grace period, or neither. You can also check your plan's Summary of Benefits and Coverage (SBC) document, which your employer is required to provide at enrollment.

If you enrolled in your FSA through your employer's benefits portal, log in and look for plan details or FAQs. Many employers also send a summary of plan rules by email during open enrollment. If you cannot find the information online, call your benefits administrator — this is a straightforward question they answer regularly.

Knowing whether your plan has carryover or a grace period changes how you should estimate your contributions. If your plan has neither, you need to be more conservative with your estimate. If it has both, you have more flexibility.

Strategies to avoid losing FSA money

The best way to avoid forfeiture is to estimate your medical expenses accurately when you enroll. Think about what you actually spent on copays, deductibles, prescriptions, dental work, and vision care in the previous year. Be realistic — overestimating to "use up" the tax benefit usually backfires.

Throughout the year, keep track of your spending. Many FSA providers offer a mobile app or online portal where you can see your balance and submit claims. Checking your balance quarterly helps you know whether you are on track or whether you need to adjust your spending.

In the final months of the year, review your balance and plan how to spend it. Common last-minute FSA purchases include over-the-counter medications (which became FSA-may be able to access in 2020), glasses or contacts, dental work, or medical equipment. If you know you will not spend the full balance, talk to your doctor or dentist about scheduling routine care before year-end.

If your plan offers a grace period, you can be slightly more aggressive with your estimate, knowing you have extra time to spend the money in early 2025. If your plan offers carryover, you can carry forward up to $610 without losing it.

What counts as a may have access to FSA expense

You can only spend FSA money on may have access to medical expenses — not on anything you want. may have access to expenses include copays, coinsurance, deductibles, prescription medications, dental care, vision care, mental health services, and certain medical equipment and supplies.

Over-the-counter medications (like pain relievers, cold medicine, and allergy medication) are now FSA-may be able to access without a prescription. Sunscreen, vitamins, and general wellness products are not. If you are unsure whether something qualifies, ask your FSA provider before you buy it — they can tell you whether you can use FSA funds for that expense.

Expenses for your spouse and dependents also count, even if they are not covered under your health insurance plan. This can be a way to use up remaining FSA balance if you have family members with medical needs.

What happens if you change jobs or lose coverage

If you leave your job or lose health coverage before the end of the plan year, you may lose access to your FSA balance. Most plans require you to be employed and enrolled in the health plan to use the FSA. When you leave, your account typically closes, and any remaining balance is forfeited — even if you had a grace period.

Some employers offer COBRA continuation coverage for FSAs, which allows you to continue using your FSA for a limited time after you leave. However, COBRA is expensive and not all employers offer it for FSAs. If your employer does offer FSA COBRA, you would need to enroll within a specific window (usually 60 days) to continue using the account.

When you start a new job, you can enroll in a new FSA during that employer's open enrollment or if you have a may have access to life event (like losing coverage). Any balance from your previous FSA does not transfer — you start fresh with the new plan.

Frequently Asked Questions

Can I get my FSA money back if I don't spend it?

No. Once the plan year ends, any unused balance is forfeited to your employer. There is no refund option, and you cannot withdraw the money. The only exception is if your employer's plan offers carryover (up to $610) or a grace period to spend remaining funds.

What if I have a medical emergency after my FSA runs out?

If you have exhausted your FSA balance, you would pay for the emergency out of pocket or use your health insurance deductible and coinsurance. This is one reason to estimate conservatively — you want to keep some balance available for unexpected expenses late in the year.

Can I use my FSA for my spouse's medical expenses?

Yes, as long as your spouse is a tax dependent. You can use FSA funds for your spouse's copays, prescriptions, dental care, and other may have access to medical expenses. This can be a way to spend down your balance if you have extra money at year-end.

Do FSAs roll over if I'm on a grace period?

No. A grace period gives you extra time to spend the money (usually through mid-March), but it does not roll over to the next plan year. After the grace period ends, any remaining balance is forfeited. Carryover and grace periods are separate features — your plan may have one, both, or neither.

What happens to my FSA if I take unpaid leave or go on disability?

This depends on your employer's plan and your specific situation. Some plans allow you to continue contributing during unpaid leave; others suspend your account. Contact your benefits administrator to understand how your plan handles leave or disability. If your account is suspended, you may not be able to access your balance during that time.