Real Money: Just how strict is the 12/31 FSA deadline?

Just take a look around and you'll notice that we're racing toward the year-end FSA deadline. And there's a good reason -- a LOT of people have their deadlines fall on the end of the calendar year. It's an exciting time around here (and for anyone getting great deals on FSA-eligible products) but it doesn't apply to all FSA holders.

So, the first thing you need to do is contact your FSA administrator, to be 100% sure of your deadline, and your options. If you do have the 12/31 deadline, it's technically pretty strict, but that doesn't mean you have to submit all your claims by the end of the year.

If you have a 12/31 deadline, there are two other dates in 2020 you need to be aware of — March 15 and March 31. These are both deadlines that may apply to you to but they're drastically different in terms of the last date you can spend your FSA funds.

Confused? Not to worry, we've got you covered.

Which deadline do you have?

As I mentioned before, there are two separate deadlines. The grace period for December 31 plans ends on March 15, while the run out period typically ends on March 31

The runout period is the time you can submit to get your FSA funds reimbursed for the previous plan year. For example, you have $300 left in your FSA in 2019 and are waiting on invoices. If your plan offers the runout period, then you likely have until March 31, 2020 to submit the receipts for the $300 or else you risk losing the money.

On the other hand, the grace period typically ends on March 15 on the following year. This is where your FSA provider gives you time to purchase new products or services before you need to forfeit your money. That $300 in your FSA funds for this year can be used up until March 15, 2020. It can include money you spend on qualified expenses anywhere between January 1 and March 15, 2019.

Your FSA provider may also give you a rollover option — and it means just that -- you can roll over up to $500 into your 2020 FSA budget. Keep in mind that your plan will only offer either the grace period or rollover options (you can't have both), they can be combined with the runout, and they may offer none of them. Your employer's plan is not obligated to offer any additional extensions for people with a year-end deadline, so again -- check with your administrator before assuming anything.

(If you still have questions, we have a fantastic guide that decodes these terms so you know exactly where you stand.)

Now I know… so what now?

No matter what your plan's rules are, it's still a good idea to comb through your 2019 expenses to see if you've already made claims on them. Hopefully, you've been keeping track of receipts and invoices for this very reason.

If you have the runout period, now's the time to make sure you spend the rest of the FSA funds before December 31. You still have time to submit receipts until the cut off date.

If you have the runout, make sure you budget accordingly so that you can use up the funds. Let's say you still have $200 left to spend and your FSA providers allows you to spend those funds until March 15, 2020. Make a budget now to see what qualified medical expenses you can make so that you're prepared.

With the rollover option, think about your expenses for the year and if you will have more than $500 remaining at plan year-end, make sure you spend it down.. Does this mean you'll need to change your contribution amount for 2020? Or are there upcoming expenses you have you didn't before?

Planning ahead will help you with budgeting and making sure you use your FSA funds the right way. It's worth taking the time to do it, because the savings are usually pretty significant.

Use it... don't lose it!


Whether you budget week-to-week, or plan to use your FSA for bigger things, our weekly Real Money column will help you maximize your flex spending dollars. Look for it every Tuesday, exclusively on the Learning Center. And for the latest info about your health and financial wellness, be sure to follow us on Facebook, Instagram and Twitter.


Real Money: How much is "too much" when it comes to FSA spending?

If you're like most folks, by this time of year, you may be sitting on a big pile of FSA money. According to our estimates, employees hand over up to $400 million of unused cash every year. Those are your hard-earned dollars disappearing back into your company's pockets.

Of course, you don't want to abandon these funds. But you don't want to blow it with your plan administrator, either. So, what's an FSA "hundredaire" to do? Start by checking out these tips.

Be strategic with your FSA balance

Spending down your FSA balance shouldn't be like an episode of "Supermarket Sweep." Instead, take a few minutes to make a list of all the things you actually need. (And if you haven't seen "Supermarket Sweep" make sure you do that right after creating the list.)

Smart spending could include replacing expired products. If you haven't purchased new glasses because the price tag scared you but you could benefit from an updated pair, now may be a good time to do it. For example, it's possible you don't have sunscreen for your upcoming cruise. If you're low on that ointment that your dermatologist recommended, call their office for a prescription.

Once the panic of missing your FSA deadline dies down, it may be easier to remember all the things you've been too frugal to buy.

Your year-end FSA shopping spree could be scrutinized

The problem with "use-it-or-lose-it" rules is by the time you learn them, it may be too late. Or you hear about them with only a few days to spare. And the latter can lead to sprinting through the aisles of your local drugstore, pitching dozens of family-sized boxes of band-aids into your cart. Both are far from ideal — and stockpiling could get the stink eye from your administrator.

As a general rule of thumb, resist the urge to buy more than three of any single item. It's common for folks to try to stockpile over-the-counter items in December to spend down their FSA balances. But doing so could backfire and your plan administrator may not reimburse you.

If you know you will use the products within the plan year, that's may be enough to pass your plan administrator's sniff test. You are less likely to see a claim rejection if you buy reasonable amounts of FSA-eligible products.

If you're still worried, you can always contact your plan administrator first. Asking them for the specifics of what FSA spending is and it's allowed may ease your mind. If you received a copy of your Summary Plan Description during open enrollment, it may also spell out these rules, too.

Keep a list for next year's FSA spending

Once your FSA deadline passes, the clock starts ticking again for next year's spending. There is always room for improvement, and the end of the year is the perfect time for reflection. If you're not happy with this year's spending, shift next year's priorities accordingly. Instead of beating yourself up for past mistakes, take the opportunity to learn from them. The new year is a chance to start fresh and avoid a big balance next December.


Whether you budget week-to-week, or plan to use your FSA for bigger things, our weekly Real Money column will help you maximize your flex spending dollars. Look for it every Tuesday, exclusively on the Learning Center. And for the latest info about your health and financial wellness, be sure to follow us on Facebook, Instagram and Twitter.