A Flexible Spending Account plan year does not have to be based on the calendar year. The FSA plan Administrator or employer decides when the FSA plan year begins, and often aligns the FSA to match their health plan or fiscal year. There is an “open enrollment” period once a year. Shop for your FSA online with us.

90 days
You are allowed, but not required, to permit FSA participants to submit receipts for reimbursement for up to a certain number of days after a plan year’s end. Most FSAs include run-out periods as a standard feature, but the duration varies – a common length is 90 days, or by March 31.

FSAs do expire; any money deferred into an FSA during the calendar year is forfeited if it is not claimed by the expiration deadline. For 2020 and 2021, the maximum salary reduction a person can put toward an FSA is $2,750.

Unlike the FSA run-out, which can be offered in conjunction with a rollover or grace period and provides up to 3 months after plan year end to spend down remaining funds for expenses incurred during the prior plan year only, the grace period allows users to spend down remaining FSA dollars on new expenses incurred …

If any funds remain in your Healthcare FSA at the end of the current plan year, you carry over up to $550 (depending on your employer’s plan) into the subsequent year, indefinitely. Your carryover balance can be used at any time for expenses incurred in the new plan year (in addition to the elected payroll deductions).

FSA plan sponsors can choose to offer ONE of the two rules when administering FSAs, but not both. This FSA regulation gives account holders the ability to “roll over” up to $550 in to the next plan year’s account to prevent a large portion of funds from being forfeited.

This means you can use the money you contributed during 2020 for eligible expenses you incur in 2020 and in 2021. You’ll have until Jan. 31, 2022, to submit claims for those expenses. Similarly, the grace period to use 2021 DepCare FSA funds will be extended through Dec.

FSA Spending Extended from March to December in 2021, 2022 The grace period for spending 2020 FSA accounts is extended to December 15, 2021 and the deadline to reimburse yourself and submit receipts is extended to December 31 due to a federal relief opportunity passed in response to COVID-19.

Why’s that? Because many employees have a surplus of FSA money they could be on the verge of losing when the plan year ends. While Health Spending Account (HSA) funds usually roll over every year, FSA funds are a use-it-or-lose-it kind of benefit, and usually expire on December 31st of each year.

Let’s find out. “Run-Out” Periods. An FSA “run-out” period refers to the period of time in the new plan year during which account holders can file claims for expenses incurred during the previous plan year. This timeframe is chosen by the employer, not the IRS, and can last for any period of time, but the most common FSA “run-out” period is 90 days.

The fine print: A health FSA administrator cannot limit reimbursements according to the employee’s salary reductions or flex credit contributions. Once more, for the people in the back: the maximum amount of reimbursement under a health FSA must be available at all times during the period of coverage, which is generally the 12-month plan year.

The grace period can be up to a maximum of two and half months, but may be shorter depending on plan setup. For instance, if your plan runs from January 1, 2019 through December 31, 2019, you would have until March 15, 2020, to use all of your FSA funds.

Grace period is an extra amount of time after the end of the plan year that allows you to use any unspent money in your FSA (health or LPFSA). The grace period can be up to a maximum of two and half months, but may be shorter depending on plan setup.