December 27, 2024
Over 29.6 million Americans opened a workplace-provided flexible spending account, or FSA, in 2018. In 2019, that number is expected to grow to 32 million. Yet, despite the increasing popularity of these accounts, most participants aren’t sure how to use FSA funds correctly and before they expire.
How does a flexible spending account work?
A growing number of US-based employers offer FSAs as a benefit to their employees. In 2018, employees could set aside up to $2,650 pre-tax dollars to cover eligible healthcare services, products and expenses. That number will increase by $50 in 2019, giving participants the option to contribute as much as $2,700 to their flexible spending account in the new year.
Regulated by the Internal Revenue Service, flexible spending account rules are left partially up to the employer’s discretion. For example, FSA money must be used within the plan year, unless:
It’s important to note that your employer can offer only one of these options (not both), but is not legally required to offer either one. At the end of the year, any money left in your account is no longer yours. Unused funds are issued to your employer, who can distribute them among participating employees, or use the money to offset the costs associated with administering benefits.
Use it or lose it: Flexible spending account rules
Regardless of whether your employer offers extensions or carryovers — or how they choose to utilize leftover funds — your FSA money will disappear at the end of the year or when the grace period is up. And according to Mara Leighton of Business Insider, this is a common occurrence: “More than $400 million is forfeited every year in FSA funds because employees either miss or forget their spending deadlines.”
To avoid losing money, look into your employer’s flexible spending account rules and check your remaining balance ASAP. If your workplace offers that mid-March grace period or carryover option, you still have time. Otherwise, December 31 will be here before you know it, and there are plenty of ways to use up that leftover balance before it’s gone forever.
5 tips on how to use FSA money before it’s gone
Whether your FSA is at $20 or $2,000 — there’s no reason to let those dollars go to waste. Here are five ways you can use up your FSA money before the end of the year.
If you still have questions about how to use FSA money — it’s a good idea to check with your benefits office for clarification. For added peace of mind, you can purchase FSA-eligible products from sites like, FSAStore.com. If you prefer to shop for items in-person, the e-commerce company has a comprehensive list of covered products and a resources page full of useful information regarding flexible spending account rules.
Setting aside FSA money in 2019
Scrambling to spend your remaining FSA balance before it expires isn’t ideal. To avoid repeating the same headache next year, Lacie Glover, staff writer at NerdWallet says, “A good starting point is determining how much of your FSA funds you spent effortlessly this year. When it’s time to decide how much goes into the next one, you can select that amount.”
In the event of a major, unexpected medical expense, taking out a personal loan to help cover gaps in insurance and FSA funds is always an option.
December 27, 2024
December 8, 2024
December 27, 2023
December 11, 2023
November 21, 2023