Not Doing This Before The End Of The Year Could Cost You Hundreds Of Dollars | Global News Avenue

Forget about spending your remaining funds Flexible Spending Account (FSA) Before the end of the year could mean giving up a lot of money.

About half of FSA holders have a balance, with the average being $441, according to the Employee Benefit Research Institute (EBRI). Some of that amount may be forfeited and returned to the worker’s employer because the FSA is a “use it or lose it” account, according to EBRI.

FSA allows workers to use Payment in US dollars before tax Out-of-pocket medical expenses, prescription drugs, etc. However, workers must spend the balance or give up unused funds before the end of the plan year.

But there are some exceptions to this rule. Some employers allow workers to carry forward up to $660 to the next year (2025), while others Provide grace period Workers are allowed an additional 2.5 months to use up the money.

According to EBRI, 42% of employers offer deferrals, 33% have traditional “use it or lose it” rules and 26% offer grace periods.

Are there additional FSA funds? Try sorting out recent expenses

Pay for products and medical expenses Using your FSA funds, you can pay out-of-pocket and then submit a claim (such as an itemized receipt) for reimbursement later—this is called a manually substantiated claim. Some retailers also offer customers the ability to simply pay an FSA –Qualified product Use an FSA card through a process called automatic verification.

EBRI found that people who submitted manual claims were less likely to have their funds forfeited than those who submitted only automated substantiated claims. Workers who filed at least one manually substantiated claim gave up $293, while those who filed no manually substantiated claims gave up $407.

“These workers may scrutinize their purchases to determine whether certain products they have purchased, such as sunscreen or antihistamines, are eligible for reimbursement from the FSA,” the EBRI report states.

Because FSA funds can be used to pay for a variety of items and services, people can use their FSA funds to pay for items previously purchased during the plan year—as long as they have the proper documentation when filing a claim.

“As the end of the year approaches, workers who face having their funds forfeited to their employers would be wise to check whether their previous purchases are FSA-eligible,” the EBRI report states.