What happens to FSA dollars at the end of the year?

A Flexible Spending Account (FSA) can save you a lot on eligible health expenses, but before you start putting money into your account, know this: FSAs are a “use it or lose it” account. 

How does an FSA work?

FSAs let you contribute pre-tax dollars from your paycheck toward your future health expenses. After paying for an eligible expense out of pocket, you can submit a claim to reimburse yourself with money from your account. 

Most health insurance plans let you enroll in an FSA, so ask your employer if you’re eligible. 

Once you’ve enrolled, you’ll need to determine how much to contribute for the year. In 2020, you can save up to $2,750 in your FSA. 

You can estimate how much you should contribute by adding up your annual medical, dental and vision expenses. The total is how much you’ll put into the account throughout the year, and the money will become FSA dollars.

Do my FSA dollars expire?

Yes. At the end of your benefits year, any unspent money you’ve put in your FSA account will disappear. It doesn’t get deposited into your savings account, and it usually doesn’t roll over from year to year. 

And your FSA doesn’t follow you when you change jobs. 

All of these are reasons why it’s a “use it or lose it” account.

Are there any exceptions?

If you put too much money in your FSA account, you usually forfeit any leftover funds. There are two potential exceptions to that rule, but your employer isn’t obligated to offer them. 

  1. Grace period — Extends the amount of time in which you can use last year’s contributions up to an extra two and a half months.

  2. Limited FSA rollover — Allows a certain amount of your FSA dollars to roll over into the next year, up to $500.

Again, your employer may not offer either exception, so make sure to check the fine print on your plan and ask questions!

How can I use my FSA dollars?

If you’ve got leftover money in your FSA near the end of your benefit year… use it or lose it! Your FSA will reimburse you for eligible vision expenses, including:

  • Annual eye exams

  • Copayments and deductibles

  • Prescription eyeglasses

  • Prescription sunglasses

  • Reading glasses

  • Contact lenses and lens care products

NEED AN EYE EXAM? Find an eye doctor near you and schedule an appointment.

How do I get reimbursed?

Your FSA reimburses you for eligible medical, dental and vision expenses that you’ve paid out of pocket. 

Let’s say you buy some contact lens solution with cash. If you keep the receipt and send it to your FSA provider, you will be reimbursed with money from your account. 

Your FSA account might also offer a debit card tied to your account. In that case, you can pay for your eligible expenses with the card upfront — no need to worry about being reimbursed. 

If you’re looking for ways to start spending your FSA contributions, find an eye doctor near you and schedule an eye exam. Or treat yourself to some premium lenses and don’t let your money go to waste.


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