FSA Carryover
If your employer offers a carryover, a portion of your unused FSA funds may automatically transfer to the next plan year after the run-out period ends. Carryovers are typically completed up to 90 days into the new plan year.
- The maximum carryover amount is set by the IRS
- Only FSA and LPFSA accounts are eligible for carryover
Eligibility requirements
To receive carryover funds:
- The FSA or LPFSA must end naturally at the close of the plan year (it cannot be terminated early)
- You must be actively employed when the carryover is processed
Carryover funds do not count toward the annual election limit, meaning you can still contribute up to the IRS maximum for the new plan year.
Run-out period
The IRS allows employers to define the length of the run-out period, up to a maximum of 90 days. During this time, you can submit claims for eligible expenses incurred in the previous plan year.
Example
If an employer offers a 90-day run-out period (January 1 – March 31) and an employee ends the year with a $600 balance:
- During the run-out period, the employee can submit claims for prior-year expenses
- Any new expenses incurred during this period (including those paid with the Forma Pre-tax Card) will be applied to the current plan year balance, not the prior year
If no funds are used during the run-out period:
- Up to $600 (or the IRS carryover limit, whichever is lower) will carry over
- The funds will appear in the employee’s account after the run-out period ends
Timing and visibility
If you were not previously a Forma member, Forma will coordinate with the prior custodian to transfer funds. Carryover funds may take 1–2 weeks after the run-out period ends to appear in your account.
Once processed, the transaction will appear in your Forma benefit history as “Member Rollover.”