There are four scenarios for unused money left in your Health FSA or LPFSA account at the end of the plan year:
- If your employer offers a carryover, a portion of your unused balance will automatically transfer to the next plan year, following the run-out period. The IRS sets a maximum carryover limit each year, and your employer determines the specific carryover amount based on this limit.
Note: An employer can’t have both a grace period and a carryover. - If your employer offers a grace period, you have up to 2.5 months after the end of the previous plan year to use unspent money on eligible medical expenses during the current plan year (for example, you could use 2024 money on a doctor’s visit in 2025.)
Note: An employer can’t have both a grace period and a carryover. - If your employer offers a run-out period, you have a specified amount of time after the end of the previous plan year to file claims for expenses incurred in the previous plan year (for example, you could file a claim in 2025 to use 2024 money on a doctor’s visit in 2024.)
- If you have a standard FSA, you lose any unspent money at the end of the plan year.
Reach out to your HR team for more information on your specific FSA plan.