How to Avoid Losing Money in Your FSA?

The "use-it-or-lose-it" rule in FSAs means that any funds left unspent at the end of the plan year are forfeited. This can lead to losing money if you contribute more than you can reasonably spend on eligible expenses within the year. To avoid this, it's crucial to estimate your healthcare expenses accurately and monitor your FSA balance throughout the year.

How Can I Track My FSA Balance to Avoid Losing Funds?

You can track your FSA balance by regularly logging into your FSA account online or through your FSA provider's app. Many employers also offer tools that send alerts or notifications as your balance gets low or as the plan year-end approaches. This helps you stay aware of how much money is left and prompts you to spend it before it's too late.

Are There Any Strategies to Avoid Losing Money if I Have Leftover FSA Funds?

If you find yourself with leftover FSA funds near the end of the year, consider purchasing eligible items in advance, such as over-the-counter medications, medical supplies, or even eyeglasses. Additionally, some FSA plans allow a grace period or a rollover option, where a small amount of unspent funds (up to $640 for 2024) can be carried over to the next year. Check with your plan to see if these options are available.

What Are Common Mistakes That Lead to Losing FSA Funds?

Common mistakes include underestimating eligible expenses, forgetting to check your balance, and not taking advantage of eligible purchases toward the end of the year. Additionally, failing to submit claims within the allowed timeframe (including the runout period) can result in losing money. To avoid these mistakes, plan ahead, track your spending, and make use of tools like Silver to identify and submit eligible expenses efficiently.

How Can Silver Help Prevent Me from Losing FSA Funds?

Silver automates the process of tracking and spending your FSA funds by connecting to your accounts at major retailers and scanning your purchases for FSA-eligible items. It also helps with timely claim submissions, ensuring that you don’t miss deadlines. By keeping you informed and automating much of the process, Silver reduces the risk of losing money due to unspent or unclaimed FSA funds.

What Should I Do if I’m Approaching the End of the Year and Still Have a Significant FSA Balance?

If you’re nearing the end of the year with a significant FSA balance, review your upcoming healthcare needs and stock up on eligible items. You might also schedule medical appointments or procedures that you’ve been delaying. Additionally, check if your plan offers a grace period or a rollover option, allowing you more time or flexibility to use the remaining funds.

How Does the FSA Grace Period Work, and How Can It Help Me Avoid Losing Money?

The FSA grace period is an extension provided by some plans that gives you extra time—typically 2.5 months after the plan year ends—to incur and claim eligible expenses. This can help you avoid losing funds if you didn’t use up your FSA balance by the original year-end deadline. If your plan offers a grace period, it’s a valuable opportunity to ensure all your FSA funds are spent wisely. Be sure to check with your employer to see if this option is available in your plan.

Can I Use My FSA Funds to Pay for Future Medical Expenses?

FSA funds can only be used for expenses incurred during the plan year or during the grace period if your plan offers one. You cannot prepay for services or products that will be used in the future unless they are purchased before the plan year ends. This is why it’s important to plan your spending carefully throughout the year to avoid having leftover funds.

How Can I Avoid Missing the Deadline for Submitting FSA Claims?

To avoid missing the deadline for submitting FSA claims, mark important dates on your calendar, including the end of the plan year and the deadline for submitting claims (often called the "runout period"). Using an app like Silver can also help by automating the claim submission process, ensuring that all eligible expenses are submitted in a timely manner, reducing the risk of forfeiting any funds.