HR Fast Facts: What Happens to an Employee’s FSA Funds When Their Plan Ends?

What happens to an employee’s flexible spending account funds depends on the “end type” of their company’s FSA plan.

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Flexible Spending Account

What happens to an employee’s flexible spending account (FSA) funds depends on the “end type” of your company’s FSA plan:

  • Up to a $610 Rollover (For plan years starting on January 1 , 2023 or later): If your company offers an FSA again next year, your employees will be able to carry over up to $610 of unused funds from their current FSA. Note that this rollover is limited only to Health Care FSAs. The employer is able to designate any amount up to $610 to be rolled over.
  • Grace Period: Employees will be able to use any funds left in their FSA for 2 and a half months after it ends.
  • Use-or-Lose: Employees will lose any funds left in their FSA after their current plan ends.

Regardless of their plan’s end type, they’ll have a runout period after their FSA ends (usually 90 days), which allows them to submit claims for any expenses they incurred during their FSA plan period.

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