If you have a Flexible Spending Account (FSA), you know it’s a fantastic way to save money on healthcare costs. But as the year winds down, a familiar question pops up: what happens to the money I haven’t spent? The thought of losing those hard-earned funds can be stressful. So, let’s clear up the confusion and answer the big question: does fsa account rollover in the traditional sense?
So, Does FSA Account Rollover? The Two Key Rules
The short answer is that it’s not a simple yes or no. The classic “use-it-or-lose-it” rule has been softened, but your employer chooses which of two main options to offer. You might have access to a rollover or a grace period, but typically not both. A rollover allows you to carry over up to $640 (for 2025) of your unused FSA funds into the next plan year. Alternatively, your employer may offer a grace period, which gives you an extra two and a half months after the plan year ends to spend down your previous year’s balance.
Getting the Most From Your FSA Funds
To avoid a last-minute scramble, proactive planning is your best friend. Don’t wait until December to start thinking about your balance. Regularly check your account online and keep track of your spending. If you find you have funds left over, consider scheduling those routine appointments you’ve been putting off, like an eye exam for new glasses or a dental cleaning. You can also stock up on eligible over-the-counter items, from bandages and first-aid kits to sunscreen and pain relievers.
Planning Ahead for Next Year’s FSA
Your experience this year is a great guide for the future. If you consistently had money left over, you might be contributing too much. Conversely, if you ran out of funds early, consider increasing your election for the next plan year. Remember, you can only change your contribution amount during open enrollment or if you have a qualifying life event, like getting married or having a baby.
While an FSA doesn’t roll over indefinitely like some other accounts, the rules do provide helpful flexibility. By understanding your specific plan’s options and managing your funds thoughtfully, you can maximize your savings and breathe easier at year’s end.
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