FSAs do not roll over to a new job, and unused money is forfeited at the end of the plan year

A Flexible Spending Account (FSA) is tied to your employer's plan, not to you as an individual. When you leave your job, you cannot transfer the FSA balance to your new employer's plan, to an IRA, or to a personal savings account. Any money remaining in your FSA at the end of the plan year is lost — this is called the "use-it-or-lose-it" rule, and it applies even if you leave mid-year.

The timing of when you leave matters. If you resign or are laid off before the plan year ends, you typically have a limited window — usually 60 to 90 days — to spend down your FSA balance on may be able to access expenses. After that window closes, any remaining funds go back to your employer. If you leave after the plan year has already ended, there is nothing left to access anyway.

Some employers offer a grace period (an extra 2.5 months after the plan year ends) or a carryover of up to $610 (the amount varies by year) into the next plan year. But these only help if you stay with the employer. Once you leave, neither the grace period nor the carryover follows you.

Key Takeaways

  • FSA balances do not transfer when you change jobs — the account closes and unspent money is forfeited.
  • You typically have 60 to 90 days after leaving your job to submit claims for expenses you already incurred, but you cannot spend new money after your employment ends.
  • Grace periods and carryovers only explore if you remain employed with the same company; they do not extend to a new job.
  • Planning FSA spending before a job change can help you avoid losing money, since you know the important date for using it.

What happens to your FSA balance when you resign or are terminated

When your employment ends, your FSA account closes when ready or at the end of the current pay period, depending on your employer's plan. You lose the right to contribute more money and to request reimbursement for new expenses. However, you may still be able to submit claims for medical, dental, or vision expenses you already paid for out of pocket during the time you were enrolled.

The important date to submit those claims is usually 60 to 90 days after your employment ends, though some plans extend it to the end of the plan year. You will need receipts or invoices showing the date of service and the amount paid. Your employer's benefits administrator or the FSA plan administrator (often a third-party company like WageWorks or HealthEquity) can tell you the exact important date and what documents they need.

Any balance remaining after the claim important date passes is forfeited. There is no exception for unused money, even if you had a medical emergency or unexpected expense after you left.

How the use-it-or-lose-it rule works across job changes

The use-it-or-lose-it rule is a requirement of FSA plans under the IRS tax code. It means that money you contribute to an FSA in a given plan year must be used for may be able to access expenses by the end of that plan year (or by the end of any grace period your employer offers). Money that is not used is forfeited and cannot be carried forward, refunded, or transferred.

When you change jobs, this rule becomes especially costly. If you leave in March with $2,000 remaining in your FSA, you cannot take that money with you. You cannot roll it into your new employer's FSA. You cannot put it into a Health Savings Account (HSA), even if your new job offers one. The money is straightforward gone.

The only partial exception is if you leave your job and when ready enroll in a new employer's FSA within the same plan year. Some plans allow you to carryover a small amount (up to $610 in 2024, though this amount changes annually) or to use a grace period. But this only works if both employers offer these features and if you enroll quickly. Most people lose the balance.

Timing your FSA spending before a job change

If you know you are leaving your job, you can reduce the amount you lose by timing your FSA spending strategically. Schedule any dental work, eye exams, or other planned medical expenses before your last day. Pay for them out of pocket during your employment and then submit the receipt to your FSA for reimbursement. This way, the money goes to something you actually need rather than being forfeited.

You can also stock up on over-the-counter items that are FSA-may be able to access, such as pain relievers, allergy medications, and first-aid supplies. These items count as may be able to access medical expenses under IRS rules, so you can purchase them and submit receipts for reimbursement. Check your plan's list of may be able to access expenses to confirm what qualifies.

If you have a dependent care FSA (used for childcare or adult care expenses), the same rule applies. Accelerate any care expenses you were planning to pay for later in the year and submit them before you leave.

FSA vs. HSA: which one follows you to a new job

An HSA (Health Savings Account) is very different from an FSA in this regard. An HSA is your personal account — it belongs to you, not your employer. When you leave your job, you keep the HSA and the money in it. You can continue to use it at your new job, or you can let it sit and grow. The balance rolls forward year after year and never expires.

However, not all jobs offer an HSA. You can only open or contribute to an HSA if you are enrolled in a high-deductible health plan (HDHP). Many employers do not offer HDHPs, so an HSA may not be an option for you. Additionally, once you leave a job, you can no longer make contributions through payroll deduction unless your new employer also offers an HSA. You can make contributions directly to an existing HSA, but the tax advantage of payroll deduction is lost.

An FSA, by contrast, is always tied to your employer's plan. There is no personal FSA account that follows you. If your new job offers an FSA, you can enroll in it as a new employee, but it is a separate account with a separate balance and a separate plan year.

What to do with leftover FSA money before you leave

Start by finding out your plan's exact important date for submitting claims after you leave. Contact your employer's HR department or the FSA plan administrator directly — do not rely on a general estimate. Some plans allow claims up to 90 days after termination; others only allow 60 days or even 30 days.

Next, gather receipts for any medical, dental, or vision expenses you paid for during your employment. These can be expenses from months earlier in the year, as long as the service date falls within your enrollment period. Submit these claims as soon as possible after you leave, because once the important date passes, the plan will not reimburse you.

If you have money left after you have submitted all possible claims, consider whether there are any may be able to access expenses you can still incur before the important date. A dental cleaning, eye exam, or prescription refill can often be scheduled quickly. But do not overspend on things you do not need just to use up the balance — the goal is to use the money on actual medical expenses.

Frequently Asked Questions

Can I roll my FSA into an HSA when I change jobs?

No. FSAs and HSAs are separate account types with different rules. You cannot transfer FSA money into an HSA, even if your new job offers an HSA. The FSA balance is forfeited when you leave your job. If your new employer offers an HSA and you enroll in a may have access to high-deductible health plan, you can open a new HSA, but it starts with a zero balance.

What if I leave my job mid-year and have not used my FSA yet?

You have a limited window — usually 60 to 90 days after your employment ends — to submit claims for expenses you already paid for out of pocket. After that important date, you cannot access any remaining balance. Plan ahead by scheduling medical appointments and submitting receipts before the important date passes.

Do I lose my FSA if I am laid off or fired?

Yes. The use-it-or-lose-it rule applies regardless of how your employment ends. Whether you resign, are laid off, or are fired, your FSA account closes and any unused balance is forfeited. You may still submit claims for expenses incurred during your employment within the allowed timeframe.

Can my new employer's FSA accept a transfer from my old FSA?

No. FSA plans do not accept transfers or rollovers from other FSAs. Each FSA is a separate account tied to a specific employer's plan. If your new job offers an FSA, you enroll in it as a new employee with a new plan year and a new balance starting at zero.

What counts as an may be able to access FSA expense I can claim after I leave?

may be able to access expenses include medical, dental, and vision care services and supplies. Common examples are doctor visits, prescriptions, dental work, eyeglasses, and hearing aids. Over-the-counter items like pain relievers and allergy medications also count. Check your plan's summary of benefits or contact the plan administrator for a complete list, since some items vary by plan.