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Spending Down Your FSA Balance by the End of the Year

Here are some things to consider regarding your FSA toward the end of your plan year so you don't lose your money.

Due to the COVID-19 relief bill signed in December 2020, employers have new options for the 2020 and 2021 plan years regarding FSA rollovers, grace periods, spenddowns and election changes.

FSA Rollovers: Plans may allow unused funds in medical or dependent care FSA plans to completely rollover from 2020 into 2021, and 2021 into 2022. If this option is chosen, the standard $550 rollover max will not apply for these plan years.

FSA Grace Period: Plans may allow a 12-month grace period for unused benefits for plan years ending in 2020 or 2021.

FSA Election Changes: Plans may allow members to make changes to their plan years ending in 2021 without a corresponding change event. If your employer chooses this option, you may be able to make changes to your election if you determine that you've initially elected to contribute too much or too little for your FSA.

FSA Spenddown for Terminated Employees: This option would allow members whose plans are terminated in the 2021 plan year to spenddown their unused FSA balances through the end of the plan year.

Please check with your employer to determine whether your plan is implementing any of these options.

As you get toward the end of your plan year, it's important to think about what to do with any remaining funds in your flexible spending account (FSA). Most of the funds you set aside in your FSA may need to be spent before the end of the plan year because you may lose what you don't spend. Unfortunately, unlike a health savings account (HSA), you don't get to keep your FSA money as long as you want.

Your employer may allow up to $550 of your FSA funds to rollover to the next year. Check with your employer to confirm whether or not your plan includes the ability to do that.

Below are some helpful tips to ensure you’re spending your FSA wisely:  

What can you spend your FSA dollars on?

Use your FSA to pay for tax qualified out-of-pocket expenses that your health plan doesn’t cover. Your FSA can pay for medical, vision or dental expenses such as:

  • Flu shots
  • Prescription sunglasses
  • Acupuncture
  • Sunscreen (30 SPF or higher)
  • Dental care
  • And much more! Visit the Eligible Expenses page for a searchable list of IRS-approved expenses that are covered by your FSA.

An FSA is unique, as you can use FSA funds on personal medical expenses and any medical dependent’s expenses. For example, if your 23-year-old daughter is home from college, you could buy her flu shot with your FSA funds. Remember, this dependent does not need to be covered by your health plan.

Need a refresher on what is an FSA and how it works? Visit the Learning Center’s Introduction to FSAs. The information features details on using your account and managing your account. 

Know your FSA balance

You can check your current balance by signing into [ or partner SSO link], logging into the Further mobile app, or by calling customer service. Understanding exactly how much you have in your FSA will help you avoid any surprises when paying for health care related expenses.

This content is for informational purposes only, you should not construe this information as legal, tax, investment, financial, or other advice. Nothing contained herein constitutes a solicitation, recommendation, endorsement, or offer by Further to buy or sell any securities or other financial instruments. There are risks associated with investing in securities. Investing in stocks, bonds, exchange traded funds, mutual funds, and money market funds involve risk of loss. Loss of principal is possible.

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