If your employer offers a carryover, they can set a certain amount of unused FSA money to automatically transfer to your next year’s FSA after the run-out period. Because of this, most carryovers won’t finish until 90 days into the new plan year. The maximum carryover amount is determined by the IRS. Only FSAs and LPFSAs are eligible for carryover.
Any amount carried over from a previous plan year doesn’t count toward your annual election, so you can still contribute up to the IRS maximum for the new plan year.
The IRS provides the employer the right to determine the length of the run-out period, so this amount of time could vary. The maximum length of the run-out period is 90 days.
For example, if your employer provides a 90-day run-out period for the FSA plan. At the end of the year, your FSA balance was $600.
- The 90-day run-out period is from January 1 to March 31. In this period, you can file reimbursement claims for eligible expenses from the previous year.
- If you use your pre-tax Forma Card during the run-out period, the expense will use your current year money instead of previous year money since the expense occurred in the current year.
- If you didn't spend any of the $600 during the run-out period, in April, you'll see $600 (or the IRS carryover limit, whichever is less) carried over to your current year FSA.
If you were not a Forma member in the prior year, we will work with your previous custodian to carryover your funds. It may take 1-2 weeks after the run-out period ends to see the carryover funds in your account. Once there, you will see a "Member Rollover" record under your transaction history.
NOTE: For your remaining balance to carryover to the next plan year, an FSA/LPFSA account must be set up for the new plan year. For example, to carry over 2024 FSA funds, you will have to enroll in a 2025 FSA. If you did not enroll in an FSA/LPFSA for the new plan year, you can access last year's funds via run-out reimbursement claims, if your employer offers a run-out period.