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The Key Takeaways
- Employee Benefits Research Institute statistics show that Flexible Spending accounts (FSAs), in average, had $441 at the close of the calendar year.
- Since FSAs have use-it-or-lose-it rules, workers may have to forfeit some or all money they haven't used by the end of the plan year.
- Some people can use their FSA excess funds to cover medical costs or purchases that they have made.
You could lose a significant amount of cash if you don’t spend your remaining flexible spending funds (FSAs) by the end year.
Employee Benefits research Institute data shows that approximately half of FSA owners had a credit balance. This averaged $441. Some of that amount was likely forfeited back to workers' employers, according to EBRI, as FSAs are 'use-it-or-lose-it' accounts.
Workers can use FSAs to cover out-ofpocket expenses for prescriptions, medical care, etc. The worker must either spend the balance down before the end the plan year or forfeit any unused funds.
And yet, there are exceptions. There are some exceptions to this rule. Some employers will allow employees to carry over up to $660 to the following year (2025), while others give workers up to 2.5 extra months to spend the money.
EBRI reports that 42% offer a rolling over, 33% use the traditional “use it or lose it” rule, and 26% have a grace period.
Do you have any extra FSA money? You can combine recent expenditures to get extra FSA funds
To pay for products and medical expenses with your FSA funds, you may pay for the expense out-of-pocket and then submit a claim (like an itemized receipt) for reimbursement later—this is known as a manually-substantiated claim. Auto-substantiation is a method that some retailers offer to allow customers to pay with their FSA cards for FSA eligible products.
EBRI discovered that workers who manually substantiated their claims were less likely than others to lose money. Workers who made at least one manually substantiated claim gave up $293 versus $407 for those who hadn't.
"These workers may be combing through their purchases to determine if certain products that they have already purchased, such as sunscreen or antihistamines, are eligible for reimbursement from their FSA," the EBRI report states.
Since FSA funds can be used to pay for a wide variety of items and services, people may be able to use their FSA money to pay for goods previously purchased during their plan year—as long as they have the proper documentation when they submit a claim.
The EBRI report notes that "as the end of the year quickly approaches, workers at risk of forfeiting funds back to their employers would do well to check to see if any of their previous purchases are FSA-eligible."
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