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.
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.
