FSA Deadline: Don't let your funds become an unintentional charity

The holidays are a time for giving, and for many people part of that giving spirit is contributing to a charity (or charities) of choice. And that's awesome.

But one place where you want to avoid being "too giving" is with your FSA account. Not only can't you use FSA funds to gift products or services to others (your FSA can only be used on you or your qualifying dependents), but your unspent FSA money doesn't go to a deserving charity -- it's used for an entirely different purpose.

What happens if you don't spend FSA funds?

Unlike HSAs, FSA funds don't rollover from year-to-year and are instead subject to what is typically called the "use it or lose it" rule.

That money doesn't just disappear. Whatever funds are unused go back to your employer. Now, to be fair, employers don't necessarily want the money back - the IRS requires they get it back. In these situations, it's used to balance losses that happen when employees overspend their accounts and then leave a company. This money helps the company offset the loss.

It's certainly a good use of money for the company, but there are no direct benefits to you. Ask yourself this: Would you donate your paycheck for your company's other financial gaps? Unless the answer is "yes" it's time to start putting your FSA money toward better things.

What to do? Get to spending!

If your plan has a December 31 spending deadline, guess what? That's just weeks away, so take a look at your FSA account. If you have funds remaining, has ways you can make sure you're not losing out on the opportunity to spend wisely.

If you're not sure where to start to zero out that FSA account before the deadline, here are a few out-of-the-box ideas:

The key takeaway is to remember that FSA funds are yours -- and there are a ton of uses you might not have even considered. If you are at risk of losing your FSA funds by December 31, browse through our growing list of more than 4,000 eligible items for your health and wellness.

In the end, make sure that zero balance in your account at the end of the year is because you spent every penny you contributed, and not because you missed out on a fantastic opportunity.


Have a year-end FSA deadline?

Have a year-end FSA deadline? Get spending tips from CEO's and learn more about your FSA!

By Jeremy Miller, CEO & Founder of and

Open enrollment is a done deal for many companies, but employees – especially those who are facing a year-end flexible spending account deadline – still need support and direction from human resources and benefits professionals.

Recent surveys have shown that consumers still don't fully understand how their spending accounts work and, more importantly, that they look to their employers as a source of education and information about how to use their accounts. You can improve employee education, engagement and satisfaction with your company's FSA by reminding employees of these key spending account tips and reminders.

1. When is the deadline to submit expenses?

For many employers, December 31 is the deadline for employees to spend down FSA funds – or risk forfeiting unused dollars. This is commonly known as the “Use-it-or-lose-it" rule.

2. Is there an extension for spending FSA dollars?

Be sure to communicate clearly (and often) if your company offers one of the following plan features that give employees extra time to spend down their FSA or submit expenses for reimbursement:

  • Carryover or Rollover Option: This allows employees to carry over up to $500 of unused FSA dollars to the next plan year. This amount is added to their balance for the next year.
  • Grace Period: A grace period gives employees two-and-a-half months beyond December 31 (until March 15) to incur expenses and spend unused FSA dollars.
  • Run-Out Period: A run-out period gives employees additional time (usually 90 days) beyond the end of the plan year to submit reimbursement requests for eligible expenses, but only if those expenses were incurred during the plan year.

Employers can offer the carryover option or a grace period, but not both. Your company is not required to offer either of these options, but if your plan includes an extended deadline, that means employees have more time and flexibility to use their accounts, so be sure they understand this benefit.