Do I have the FSA Grace Period?

"I keep hearing about it, but don't know if a Grace Period applies to my FSA. What is a Grace Period? How do I know if I have one?

If you're asking yourself these questions, you're not the only one! Deadlines can be confusing, but once you learn more, that confusion will disappear.

At FSAstore.com, our goal is to make it easy to use and understand your FSA, so read on for more details!

For many people, their Flexible Spending Account (FSA) deadline ended on December 31. But, your FSA deadline may vary (this also depends on your employer and when your FSA plan year started), and some FSA plans are structured to have a Grace Period. This Grace Period provides for an additional two-and-a-half months following the last day of the plan year to spend your remaining funds AND incur new eligible expenses.

For example, if your plan ending in December has a Grace Period, then you'd be able to still use your remaining FSA money until March 15. If you're not certain about this deadline, it's best to ask your FSA administrator or your HR department at work to find out when your plan year ends and how much FSA money you have left for your plan year.

"I also heard about a carryover? What is that? Do I have one?"

Employers have another option to help employees avoid losing their hard earned funds: to carry over up to $640 in FSA money to the following year (for plan years starting in 2024). This doesn't apply to ALL FSAs, and it's again best to check in with your FSA administrator or HR department to find out if you have the carryover. If you don't end up using your FSA money or if your FSA has a carryover and more than $640 is unspent, that money is then forfeited to the employer.

"What happens if I have claims to file? Can I still file a claim even after the FSA year is over, or if the Grace Period ended?"

Similar to a Grace Period in terms of giving you an extension, with a Run-Out period you'll have typically three months after the end of your plan to get reimbursed for expenses incurred during the prior plan year. This means you cannot get reimbursed for any new expenses.

But, what about if I want to file a claim for a service I received before the FSA plan year? You cannot file claims outside of the plan year or Grace Period.

Have more questions about claims? Visit our Learning Center for additional answers!

Need to use your FSA dollars from 2023? Wondering how to use the rest of your FSA money before the Grace Period deadline?