HSA/FSA
FSA ‘Use It or Lose It’ Explained & Tips To Spend Funds
We explain the IRS FSA “Use It or Lose It” rule including how and when your FSA dollars expire, and strategies to spend FSA dollars before they’re gone.
November 26, 2025
Teddy Butz
Director of Product & Partner Marketing
Overview
Overview
Overview
🚀 Fast Facts: The FSA “use it or lose it” rule explained
Flexible Spending Account (FSA) funds are meant to be spent within the plan year, so any unspent funds expire
The “use it or lose it” rule ensures that FSA funds are spent within their respective benefits period
There are a few exceptions that allow you to spend funds from the previous year, including a grace period and rollover amount
“Use it or lose it.” You’ve heard the term applied to your Flexible Spending Account, but what does it mean? Well in 2023, it’s estimated that U.S. workers forfeited $4.5 billion dollars in unspent FSA contributions, which means they’re losing value from their annual income.
To avoid losing your FSA dollars, we’ll cover all the essential information you need, including:
Let’s get started by covering the critical information about how this rule works and when you stand to lose FSA money to expiration.
What is the IRS Flexible Spending Account (FSA) “use it or lose it” rule?
The Flexible Spending Account (FSA) “use it or lose it” rule stipulates that FSA funds that are not spent within the year are forfeited to your employer. Essentially, this means you’ll lose whatever you don’t spend within the plan year, aside from exceptions like a rollover amount or grace period.
Is an FSA “use it or lose it”?
Yes. Flexible Spending Accounts (FSAs) are designed to be spent within the year. The “use it or lose it” rule applies to all FSAs, meaning that any left over FSA funds will be forfeited to your employer if they are unused, aside from a few exceptions, such as the grace period and rollover amount.
What is an FSA grace period?
An FSA grace period is a length of time beyond the plan’s year end during which you can still claim an expense using your past year’s funds. This can be up to a maximum of 2 ½ months from the end of the benefits period, meaning it can allow you to claim payments made as late as March 15th of the following year.
What is an FSA runout period?
An FSA runout period refers to the length of time you’re able to submit a claim for an expense incurred in the previous year. This length of time is determined by your provider, but it’s commonly 90 days after the end of the benefits period to ensure you have adequate time to claim expenses you made at the end of the previous year.
What is an FSA rollover amount and what are the max amounts for this year?
An FSA rollover amount is the sum total of unused funds that you are allowed to carry over from one plan year to the next. The rollover amount is set by the IRS, and can change from year to year, so it’s crucial to check what this amount is each year. For 2025, the rollover amount is $660. The projected rollover amount for 2026 is $680.
In general, this amount is adjusted to account for inflation: in 2021 it was $550, in 2022 it was $570, in 2023 it was $610, in 2024 it was $640. It’s also important to note that a rollover amount can only carry over from the previous year, so it will not continue to carry over into another year after that. You must spend carry over funds within the next plan year.
What about dependent care FSAs?
Yes, the “use it or lose it” rule also applies to a Dependent Care FSA (DCFSA), as this account is also designed to be spent within a fiscal year.
How FSA fund expiration works
Now that you understand the “use it or lose it” rule, we’ll get into the specifics about exactly how this applies to your FSA, and how and when you might lose your FSA dollars to expiration.
Why is an FSA “use it or lose it” and why do dollars expire?
An FSA is an advantaged account meant to provide employees with a pre-tax benefit for money that goes towards qualifying medical expenses. These advantages are limited to per-year time periods to prevent people or businesses from taking advantage of them, so the funds must be spent within a single plan year.
In contrast, an HSA is a long-term tax-advantaged account that lets you grow a large pool you can draw from for health-related expenses. With these accounts, you can invest funds and make other long-term decisions that allow you to grow this amount over a longer period of time. While there are are annual contribution limits on an HSA, unlike an FSA, funds can be drawn at any time to be spent on qualifying medical expenses
When do FSA funds expire?
While most FSA funds work on a calendar year timeline, running from January 1st to December 31st, they can have any start date as defined by your plan administrator. This means your FSA funds will likely expire at the end of the year.
Some plans may run on a different plan year timeline, like from an employee’s start date, or run on the company’s fiscal year. And other provisions in your plan like the grace period or carryover period can extend the actual period of time (the dates) where you can submit expenses, into your next plan year.
Do you lose FSA money at the end of the year?
You will lose any unspent FSA money at the end of your plan year, which will often be by December 31st. Your specific plan’s grace period or carryover period will sometimes enable you an additional window of time into the new plan year where you can still spend your FSA before you lose it.
However, when you’ve exhausted any provisions for your FSA like the grace period or carryover period, any unspent money will be forfeited.
Where does FSA money go when you lose it?
Employers offer FSAs as a way to maximize income with tax-free dollars, but if you don’t spend your FSA on eligible products, essentially you are forfeiting that portion of your income back to your employer. It’s like giving back money you were compensated to your employer, so you definitely want to spend as much of your FSA as you can before the end of your plan year to avoid losing it.
How to check when your FSA funds expire
If you have an FSA through your employer, you most likely have an online portal where you can view your plan details, including your current remaining balance, and any rollover amounts. Here, you should also be able to find details about when your plan year ends, along with any benefits you have that may entitle you to provisions that help you spend FSA dollars into next year.
If you don’t have an online portal you can log in to, you should review any documentation you were given when you started the FSA, and you can always check with your FSA administrator or HR representative to get details about your FSA plan.
5 tips for using FSA dollars before you lose them
If you stand to lose your FSA funds because of the “use it or lose it:” rule, here are some strategic ways to approach spending your FSA dollars before they expire:
1. Check online retailers with FSA eligibility to shop instantly
Some online shops are set up with a checkout that allows you to pay for their products with your FSA account or card directly at the checkout. Simply select that option at checkout, and you can purchase the product using your FSA. This cuts out reimbursement work, and shortens your timeline for getting a product purchased.
Like in the example above with Forme’s posture-correcting t-shirts, you can pay for the product directly with your FSA at the checkout. Look for this symbol while shopping, or checkout any of the stores in Flex’s Shop to find more options where you can pay for products with your FSA at checkout.
2. Shop at in-person stores and get reimbursed later
You can also just head out and shop in person, looking for places you can buy eligible products. Some medicine-cabinet-type items or everyday items like sunscreen can often be purchased with an FSA, so be on the lookout for eligible products that can help you spend your remaining FSA balance before it expires.
3. Consider getting an LMN to cover items you were going to buy anyway
Some FSA-eligible products and services require a Letter of Medical Necessity (LMN) before purchase. A gym membership for example is a long-term higher cost service, but an FSA can be used to cover a gym membership if you have an LMN.
PRO TIP: If needed, Flex allows consumers to obtain a Letter of Medical Necessity service during checkout, so you can get one instantly right before purchasing the product you need. 24-hour Fitness for example has an online consultation that takes only minutes, and can email you an LMN within 2 hours if you qualify.
These kinds of hacks can save you a lot of time, and help you spend down your FSA balance faster and without roadblocks.
4. Look for surprising items you might not have known you can use an FSA for
Many people are surprised by the items that can be eligible for reimbursement with your FSA, especially if you can get a Letter of Medical Necessity before purchasing it. These are the top 10 items we find people the most surprised you can use an FSA for (hint: click each link for a full rundown on when these items are HSA/FSA-eligible):
5. Find creative ways to spend the FSA funds
There are some strategies you can use to spend your FSA before it expires this year that you might not have thought of. These ideas can help you run down your balance faster, especially if you’re already into trying to spend carryover balances.
Schedule appointments you’ve been putting off - Like dental cleanings, or that bigger dental surgery you’ve been procrastinating on
Spend the funds on your family - A lot of FSAs allow for spouse, children, or dependent spending, so consider the things they need as well
Look for big ticket items that benefit the whole house - Bigger exercise equipment or vacation supplies can help spend down FSA money faster
Enable your resolutions and goals - Especially if your balance is expiring at the end of the year, purchase items that will help with your new year health goals
Stockpile the medicine cabinet with essentials - If supplies are running low, don’t wait until the next year—these smaller-cost items can really add up, and you were going to buy them anyway when they run out
26 popular products and services to use your FSA on before you lose it
If you’re looking for ways to spend your FSA before it expires, one of the easiest ways is to purchase products from online shops that allow you to pay directly with your FSA plan or card at checkout, and can provide a Letter of Medical Necessity (LMN) for items that require it to be eligible right at checkout.
This is a fast and efficient way to spend your FSA if you are about to lose it, and gives you a greater range of options than shopping around in person. Check out the Flex Shop for 400+ retailers with FSA-eligible products in their online stores, or here are some of our favourite online stores that offer FSA-eligible products:
Fitness and exercise products, services, and apps
Product / Service | Description |
 | A global leader in at-home pilates reformer equipment and education. |
 | Road-ready bikes for cycling enthusiasts, built by cycling experts. |
 | A wearable biosensor that provides personalized hydration data — scientifically validated and delivered in real time. |
 | A personalized workout app that takes the guesswork out of your workouts. |
 | Attach this device to your own fitness equipment to enhance your workouts. |
 | Build your own space-saving at-home workouts with these adjustable dumbbells. |
 | See even better results on your GLP1 weight loss journey with this telehealth coaching program. |
Home wellness products, clothing, and footwear
Product / Service | Description |
 | Posture-correcting clothing including shorts, scrubs, leggings, bras, and more. |
 | These personalized insoles and sandals are custom-built to support your foot’s contours. |
 | An air purifier with innovative TPA® technology, designed to efficiently remove pollutants from the home. |
 | Achieve calm in 3-minutes with this drug-free anxiety treatment solution. |
 | An advanced form of vibration therapy using high-frequency oscillations to alleviate muscle tension. |
 | Get workout recovery, edema, and vein relief with this advanced at-home compression therapy system. |
 | Supports healing, growth, and transformation with this bilateral stimulation device. |
Supplements, nutrition, and general health products
Product / Service | Description |
 | A proprietary blend of five potent seaweed species to support thyroid, hormone, and gut health. |
 | Physician-formulated supplements that support overall health and nutrition. |
 | A lifestyle and wellness health app proven to help those with challenging schedules or lack of energy. |
 | Superfood-based natural nutrition that helps ease menstrual and menopausal symptoms. |
Sleep wellness products
Product / Service | Description |
 | Pillows, sheets, and bedding that’s actually made for how you sleep. |
 | White noise machines and smart fans to help you get a restful, uninterrupted sleep. |
 | Air-based technology for your bed that can heat and cool your bed to the ideal temperature. |
 | Stop snoring with this mouth tape and nose strips that actually stay on all night. |
 | Custom-built blackout shades made to fit your space and give you a better night’s sleep. |
Skincare products
Product / Service | Description |
 | Luxury skincare products and daily essentials like sunscreen that leave you with radiant skin. |
 | Red light therapy mask that treats fine lines, wrinkles, redness, pigmentation, acne, and more. |
 | Founded in 1872 in Ginza, Tokyo, and is one of the world’s biggest names in Skincare. |
You don’t want to forfeit any of your FSA money, so understanding how you plan works, and using some of these strategies like your rollover period, grace period, or creative ways to spend funds can help you spend your FSA before it expires. If you’re on a time crunch and have a lot of money left in your FSA account, make sure to check out the Flex Shop for hundreds of online retailers and services that offer FSA-eligible products you can purchase online.
🚀 Fast Facts: The FSA “use it or lose it” rule explained
Flexible Spending Account (FSA) funds are meant to be spent within the plan year, so any unspent funds expire
The “use it or lose it” rule ensures that FSA funds are spent within their respective benefits period
There are a few exceptions that allow you to spend funds from the previous year, including a grace period and rollover amount
“Use it or lose it.” You’ve heard the term applied to your Flexible Spending Account, but what does it mean? Well in 2023, it’s estimated that U.S. workers forfeited $4.5 billion dollars in unspent FSA contributions, which means they’re losing value from their annual income.
To avoid losing your FSA dollars, we’ll cover all the essential information you need, including:
Let’s get started by covering the critical information about how this rule works and when you stand to lose FSA money to expiration.
What is the IRS Flexible Spending Account (FSA) “use it or lose it” rule?
The Flexible Spending Account (FSA) “use it or lose it” rule stipulates that FSA funds that are not spent within the year are forfeited to your employer. Essentially, this means you’ll lose whatever you don’t spend within the plan year, aside from exceptions like a rollover amount or grace period.
Is an FSA “use it or lose it”?
Yes. Flexible Spending Accounts (FSAs) are designed to be spent within the year. The “use it or lose it” rule applies to all FSAs, meaning that any left over FSA funds will be forfeited to your employer if they are unused, aside from a few exceptions, such as the grace period and rollover amount.
What is an FSA grace period?
An FSA grace period is a length of time beyond the plan’s year end during which you can still claim an expense using your past year’s funds. This can be up to a maximum of 2 ½ months from the end of the benefits period, meaning it can allow you to claim payments made as late as March 15th of the following year.
What is an FSA runout period?
An FSA runout period refers to the length of time you’re able to submit a claim for an expense incurred in the previous year. This length of time is determined by your provider, but it’s commonly 90 days after the end of the benefits period to ensure you have adequate time to claim expenses you made at the end of the previous year.
What is an FSA rollover amount and what are the max amounts for this year?
An FSA rollover amount is the sum total of unused funds that you are allowed to carry over from one plan year to the next. The rollover amount is set by the IRS, and can change from year to year, so it’s crucial to check what this amount is each year. For 2025, the rollover amount is $660. The projected rollover amount for 2026 is $680.
In general, this amount is adjusted to account for inflation: in 2021 it was $550, in 2022 it was $570, in 2023 it was $610, in 2024 it was $640. It’s also important to note that a rollover amount can only carry over from the previous year, so it will not continue to carry over into another year after that. You must spend carry over funds within the next plan year.
What about dependent care FSAs?
Yes, the “use it or lose it” rule also applies to a Dependent Care FSA (DCFSA), as this account is also designed to be spent within a fiscal year.
How FSA fund expiration works
Now that you understand the “use it or lose it” rule, we’ll get into the specifics about exactly how this applies to your FSA, and how and when you might lose your FSA dollars to expiration.
Why is an FSA “use it or lose it” and why do dollars expire?
An FSA is an advantaged account meant to provide employees with a pre-tax benefit for money that goes towards qualifying medical expenses. These advantages are limited to per-year time periods to prevent people or businesses from taking advantage of them, so the funds must be spent within a single plan year.
In contrast, an HSA is a long-term tax-advantaged account that lets you grow a large pool you can draw from for health-related expenses. With these accounts, you can invest funds and make other long-term decisions that allow you to grow this amount over a longer period of time. While there are are annual contribution limits on an HSA, unlike an FSA, funds can be drawn at any time to be spent on qualifying medical expenses
When do FSA funds expire?
While most FSA funds work on a calendar year timeline, running from January 1st to December 31st, they can have any start date as defined by your plan administrator. This means your FSA funds will likely expire at the end of the year.
Some plans may run on a different plan year timeline, like from an employee’s start date, or run on the company’s fiscal year. And other provisions in your plan like the grace period or carryover period can extend the actual period of time (the dates) where you can submit expenses, into your next plan year.
Do you lose FSA money at the end of the year?
You will lose any unspent FSA money at the end of your plan year, which will often be by December 31st. Your specific plan’s grace period or carryover period will sometimes enable you an additional window of time into the new plan year where you can still spend your FSA before you lose it.
However, when you’ve exhausted any provisions for your FSA like the grace period or carryover period, any unspent money will be forfeited.
Where does FSA money go when you lose it?
Employers offer FSAs as a way to maximize income with tax-free dollars, but if you don’t spend your FSA on eligible products, essentially you are forfeiting that portion of your income back to your employer. It’s like giving back money you were compensated to your employer, so you definitely want to spend as much of your FSA as you can before the end of your plan year to avoid losing it.
How to check when your FSA funds expire
If you have an FSA through your employer, you most likely have an online portal where you can view your plan details, including your current remaining balance, and any rollover amounts. Here, you should also be able to find details about when your plan year ends, along with any benefits you have that may entitle you to provisions that help you spend FSA dollars into next year.
If you don’t have an online portal you can log in to, you should review any documentation you were given when you started the FSA, and you can always check with your FSA administrator or HR representative to get details about your FSA plan.
5 tips for using FSA dollars before you lose them
If you stand to lose your FSA funds because of the “use it or lose it:” rule, here are some strategic ways to approach spending your FSA dollars before they expire:
1. Check online retailers with FSA eligibility to shop instantly
Some online shops are set up with a checkout that allows you to pay for their products with your FSA account or card directly at the checkout. Simply select that option at checkout, and you can purchase the product using your FSA. This cuts out reimbursement work, and shortens your timeline for getting a product purchased.
Like in the example above with Forme’s posture-correcting t-shirts, you can pay for the product directly with your FSA at the checkout. Look for this symbol while shopping, or checkout any of the stores in Flex’s Shop to find more options where you can pay for products with your FSA at checkout.
2. Shop at in-person stores and get reimbursed later
You can also just head out and shop in person, looking for places you can buy eligible products. Some medicine-cabinet-type items or everyday items like sunscreen can often be purchased with an FSA, so be on the lookout for eligible products that can help you spend your remaining FSA balance before it expires.
3. Consider getting an LMN to cover items you were going to buy anyway
Some FSA-eligible products and services require a Letter of Medical Necessity (LMN) before purchase. A gym membership for example is a long-term higher cost service, but an FSA can be used to cover a gym membership if you have an LMN.
PRO TIP: If needed, Flex allows consumers to obtain a Letter of Medical Necessity service during checkout, so you can get one instantly right before purchasing the product you need. 24-hour Fitness for example has an online consultation that takes only minutes, and can email you an LMN within 2 hours if you qualify.
These kinds of hacks can save you a lot of time, and help you spend down your FSA balance faster and without roadblocks.
4. Look for surprising items you might not have known you can use an FSA for
Many people are surprised by the items that can be eligible for reimbursement with your FSA, especially if you can get a Letter of Medical Necessity before purchasing it. These are the top 10 items we find people the most surprised you can use an FSA for (hint: click each link for a full rundown on when these items are HSA/FSA-eligible):
5. Find creative ways to spend the FSA funds
There are some strategies you can use to spend your FSA before it expires this year that you might not have thought of. These ideas can help you run down your balance faster, especially if you’re already into trying to spend carryover balances.
Schedule appointments you’ve been putting off - Like dental cleanings, or that bigger dental surgery you’ve been procrastinating on
Spend the funds on your family - A lot of FSAs allow for spouse, children, or dependent spending, so consider the things they need as well
Look for big ticket items that benefit the whole house - Bigger exercise equipment or vacation supplies can help spend down FSA money faster
Enable your resolutions and goals - Especially if your balance is expiring at the end of the year, purchase items that will help with your new year health goals
Stockpile the medicine cabinet with essentials - If supplies are running low, don’t wait until the next year—these smaller-cost items can really add up, and you were going to buy them anyway when they run out
26 popular products and services to use your FSA on before you lose it
If you’re looking for ways to spend your FSA before it expires, one of the easiest ways is to purchase products from online shops that allow you to pay directly with your FSA plan or card at checkout, and can provide a Letter of Medical Necessity (LMN) for items that require it to be eligible right at checkout.
This is a fast and efficient way to spend your FSA if you are about to lose it, and gives you a greater range of options than shopping around in person. Check out the Flex Shop for 400+ retailers with FSA-eligible products in their online stores, or here are some of our favourite online stores that offer FSA-eligible products:
Fitness and exercise products, services, and apps
Product / Service | Description |
| A global leader in at-home pilates reformer equipment and education. |
| Road-ready bikes for cycling enthusiasts, built by cycling experts. |
| A wearable biosensor that provides personalized hydration data — scientifically validated and delivered in real time. |
| A personalized workout app that takes the guesswork out of your workouts. |
| Attach this device to your own fitness equipment to enhance your workouts. |
| Build your own space-saving at-home workouts with these adjustable dumbbells. |
| See even better results on your GLP1 weight loss journey with this telehealth coaching program. |
Home wellness products, clothing, and footwear
Product / Service | Description |
| Posture-correcting clothing including shorts, scrubs, leggings, bras, and more. |
| These personalized insoles and sandals are custom-built to support your foot’s contours. |
| An air purifier with innovative TPA® technology, designed to efficiently remove pollutants from the home. |
| Achieve calm in 3-minutes with this drug-free anxiety treatment solution. |
| An advanced form of vibration therapy using high-frequency oscillations to alleviate muscle tension. |
| Get workout recovery, edema, and vein relief with this advanced at-home compression therapy system. |
| Supports healing, growth, and transformation with this bilateral stimulation device. |
Supplements, nutrition, and general health products
Product / Service | Description |
| A proprietary blend of five potent seaweed species to support thyroid, hormone, and gut health. |
| Physician-formulated supplements that support overall health and nutrition. |
| A lifestyle and wellness health app proven to help those with challenging schedules or lack of energy. |
| Superfood-based natural nutrition that helps ease menstrual and menopausal symptoms. |
Sleep wellness products
Product / Service | Description |
| Pillows, sheets, and bedding that’s actually made for how you sleep. |
| White noise machines and smart fans to help you get a restful, uninterrupted sleep. |
| Air-based technology for your bed that can heat and cool your bed to the ideal temperature. |
| Stop snoring with this mouth tape and nose strips that actually stay on all night. |
| Custom-built blackout shades made to fit your space and give you a better night’s sleep. |
Skincare products
Product / Service | Description |
| Luxury skincare products and daily essentials like sunscreen that leave you with radiant skin. |
| Red light therapy mask that treats fine lines, wrinkles, redness, pigmentation, acne, and more. |
| Founded in 1872 in Ginza, Tokyo, and is one of the world’s biggest names in Skincare. |
You don’t want to forfeit any of your FSA money, so understanding how you plan works, and using some of these strategies like your rollover period, grace period, or creative ways to spend funds can help you spend your FSA before it expires. If you’re on a time crunch and have a lot of money left in your FSA account, make sure to check out the Flex Shop for hundreds of online retailers and services that offer FSA-eligible products you can purchase online.
Flex is the easiest way for direct to consumer brands and retailers to accept HSA/FSA for their products. From fitness and nutrition, to sleep and mental health, Flex takes a holistic view of healthcare and enables consumers to use their pre-tax money to do the same.