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Frequently Asked Questions Insurance

What happens to the health care flexible spending accountand the dependent care flexible spending account (FSAFEDs) dollars after the benefit period? If I contribute $2,400 for the year and use only $1,800, is the remaining $600 returned to me or is it carried over into the next year?

Neither is the case.  Health care flexible spending accounts and dependent care flexible spending accounts are use-or-lose accounts.  The IRS requires the money you set aside as a salary deduction be spent during a specific benefit period.  You have until the end of the benefit period to incur expenses for the balance in your account.  After the end of the benefit period and after the deadline for submission of claims, all money not spent or reimbursed is forfeited.  You are not refunded the remaining balance and it does not roll over.

However, there are ways to reduce your risk.  FSAFEDS gives you until March 15 of the following year, or 14 and a half months, to incur eligible expenses.  Similarly, you have until April 30, or 16 months since the start of the benefit period, to submit your claims.  If you calculate your eligible expenses carefully and contribute conservatively, you are less likely to have unspent health care flexible spending accountor dependent care flexible spending account dollars.

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