Do FSA balances expire?

Flexible Spending Account (FSA) funds typically expire at the end of your employer's plan year, which is usually December 31st for most people.

Under IRS rules, FSAs follow a strict "use-it-or-lose-it" policy. Any unspent money left in your account when the period ends is generally forfeited and returned to your employer.

Employer Exceptions

Your employer may choose to offer one of two optional extensions (they cannot offer both):

• Grace Period: An extra 2.5 months (typically until March 15th) to spend remaining funds on new medical expenses.
• Carryover (Rollover): Allows you to roll over a limited amount of unused funds into the next plan year—up to $680 for 2026.

Run-Out Period vs. Expiration Date

Do not confuse the spending deadline with the run-out period. A run-out period (often 90 days) gives you extra time to submit paperwork and receipts for past purchases or services you already incurred before the plan year ended, but it does not let you buy new items.

You can review official guidelines and contribution limits on the FSAFEDS Support Page or check the Optum Bank FSA Resources to learn more about spending down your balance.

Unused Flexible Spending Account (FSA) money is generally subject to an IRS Use or Lose rule, meaning any leftover funds are forfeited back to your employer unless your plan offers a specific extension.

What Happens to the Money

• Forfeiture: Under standard rules, unspent cash reverts to the company. Employers typically use these forfeited funds to cover administrative costs for the benefit plan.
• No Cash-Out: You cannot cash out, transfer to another person, or move unused FSA money into a personal bank account or a Health Savings Account (HSA).

Employer Options That Save Your Funds

Employers are not required to offer extensions, but they can choose one of two options (though they cannot offer both for the same health FSA):

• Carryover Option: Your employer may allow you to roll over a portion of unused health FSA funds into the next plan year. For the 2026 plan year, the IRS allows a maximum carryover limit of up to $680.
• Grace Period Option: Your employer may offer an extension of up to 2½ months (such as through March 15 for a calendar-year plan) to incur new, eligible expenses using your previous year's balance.

Important Deadlines to Check

• Run-Out Period: This is a separate window (set by your employer) after the plan year ends where you can submit claims and paperwork for expenses you already incurred before the year ended.
• Always check with your specific HR department or plan administrator to verify if your plan uses a carryover, a grace period, or a strict cutoff.

Yes, you can carry over up to $680 of unused health Flexible Spending Account (FSA) funds into 2027, but only if your specific employer's plan allows it.

Key Carryover Rules

• Employer Choice: The IRS allows a carryover, but employers are not required to offer it. Check with your HR department or FSA Store guidance to see if your plan includes this feature.
• The Limit: The maximum carryover set by the IRS from 2026 to 2027 is $680. Any unused amount above your employer's set limit (or above $680) will be lost unless a grace period applies.
• No Double-Dipping: Employers can choose to offer either a carryover or a 2.5-month grace period (which extends your spending time to March 15, 2027), but they cannot offer both.
• Account Types: Carryover rules apply strictly to health FSAs and limited-purpose FSAs; Dependent Care FSAs do not allow carryovers.
• Contribution Impact: Money you carry over does not reduce or count against your maximum contribution limit for 2027.

Your Flexible Spending Account (FSA) funds typically expire at the end of your employer's plan year—most commonly on December 31st.

How to Check Your Specific Deadline

• Check your online portal: Log in to your provider's website (such as HealthEquity, Optum Bank, or WageWorks) to view your exact plan year dates and remaining balance.
• Review your employer documents: Look at your Summary Plan Description or your original enrollment paperwork from open enrollment.
• Ask HR or your benefits administrator: Contact your human resources department or call the phone number listed on the back of your FSA debit card.

Important Plan Extensions to Look For

Ask your administrator if your company offers one of the following rules, as employers can offer only one of these options (or none at all):

• Grace Period: An extra 2.5 months (usually until March 15th if your plan ends December 31st) to spend remaining funds on new medical care.
• Carryover (Rollover): Allows you to roll over a limited amount of unused money into the next plan year (up to $680 for 2026).
• Run-out Period: A short window after your plan ends (often 90 days) where you cannot buy new things, but you can still submit paperwork to get paid back for past expenses.

Yes, you generally lose your unspent money at the end of the plan year because of the IRS "use-it-or-lose-it" rule.

What Happens to Unused Funds

• Forfeited to Employer: Any leftover money normally goes back to your employer to help pay for plan administration costs.
• No Roll-Over by Default: Unlike health savings accounts (HSAs), standard FSAs do not automatically save your balance for the next year.

You can read more details about these rules at the FSA Store Learning Center.

Common Plan Exceptions

Your employer can choose to offer one of two optional extensions, but they cannot offer both at the same time for a health care FSA:

• Grace Period: An extra 2.5 months into the new year to spend your old funds.
• Carryover: A way to roll over a limited amount of unused money into the next year (up to $680).

Check with your HR department or review your specific Greenpath Financial Wellness plan guide to see if your employer allows a grace period or carryover.