Health care account participants may carry over part of the account for use in the next year, so long as they have accounts for that following year. Image: MargJohnsonVA/Shutterstock.com
By: FEDweek StaffToward the end of the year, some employees become concerned about losing money in their health care flexible spending accounts due to the program’s “use or lose” rules. The reaction in some cases is to attempt to spend down their accounts by making additional reimbursable purchases before the end of the year.
However, that may not always be necessary. Health care account participants may carry over part of the account for use in the next year, so long as they have accounts for that following year. For unspent 2024 money carried into 2025, that limit is $640 (for unspent 2025 health care account money eligible to be carried into 2026, the limit will be $660).
The use or lose feature typically is not a major concern regarding dependent care FSAs because those expenses typically are more predictable. Also, dependent care accounts have a grace period, during which reimbursable expenses may be charged to a plan year, running for 2 ½ months beyond the end of the calendar year.
Unlike some FSA programs, FSAFEDS makes the full amount of your annual election available from the start of the benefit period, allowing for immediate access to funds. It also provides an online account management system, making it easy for federal employees to submit claims, view account balance, and track reimbursements.
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