Your FSA Year-End Survival Manual: Don't Forfeit a Dollar

December 27th. I got an email from my benefits portal. Subject line: Your FSA balance expires in 4 days.

I had $340 left. I had no idea.

I spent the next two hours reading eligibility rules, figuring out same-day Amazon delivery, and ordering enough allergy meds, bandages, and OTC stuff to last my family most of next year. I got most of it spent. I forfeited $22 because one item arrived January 2nd.

This happens to tens of millions of people every year. The FSA deadline isn’t hidden — it’s in the plan documents nobody reads until it’s almost too late.

The 30-second cheat sheet

What expires when

• Healthcare FSA: Dec 31 of the plan year (with $680 carryover OR 2.5-month grace period if your plan offers it).
• Dependent Care FSA: Dec 31, no carryover. Some plans offer the grace period.
• LSA: Almost always Dec 31, no exceptions. Don't dawdle.
• HSA: Never expires. Rolls over forever. Skip the panic.

TL;DR: FSA and LSA dollars die at year-end (with narrow exceptions). HSA never dies.

The Q4 spending calendar

October: audit your balance

Log into your FSA portal and write down your remaining balance. Look up your plan's specific rules: do you have carryover ($680 max for 2026) or a grace period (until March 15) or neither? Most people have no idea what their plan offers — this is a 5-minute task that determines your whole strategy.

November: schedule eligible appointments

Dental cleanings, eye exams, dermatology appointments, physical therapy sessions, mental health visits — all FSA-eligible copays. Book them in November so they happen before the deadline.

Mid-December: stockable items

Order a year's supply of contacts, prescription glasses, prescription sunglasses. Stock the medicine cabinet — OTC pain relievers, period products, sunscreen, bandages, allergy meds. None of this expires anytime soon.

December 31: last-minute rescue plays

Same-day Amazon delivery on OTC essentials, period products, sunscreen, first aid kits. Caeli alerts you 30/15/3 days before the deadline so you don't end up scrambling on the 31st.

TL;DR: October audit. November appointments. December stockpiling. Caeli sends the reminders.

The "home health audit" play

Walk through your medicine cabinet in early December. Replace anything expired (allergy meds, pain relievers, antacids). Stock first aid (bandages, antiseptic, instant cold packs). Replace your toothbrush head, electric toothbrush head, water flosser refills. Reorder contacts, glasses, prescription sunglasses. Top off period products.

Most people find $200 to $500 of legitimate FSA spending they didn't realize they needed. Better to keep that money than forfeit it.

TL;DR: December medicine-cabinet audit recovers $200–$500 of FSA spend most people leave on the table.

Frequently asked questions

How much money do Americans forfeit in FSA every year?

Estimates run from $400 million to $4 billion depending on the year and source. The widely-cited Mercer study put forfeits at around $400 per FSA holder on average. Industry-wide, conservative estimates are around $1 billion annually.

What's the FSA carryover limit for 2026?

$680 maximum into the next plan year, if your employer's plan offers carryover. The IRS sets this as 20% of the annual contribution limit. Anything above $680 is forfeited.

Can I use my FSA on December 31 to buy sunscreen for next summer?

Yes — sunscreen with SPF 15+ is auto-eligible and doesn't expire for years. Same for OTC meds, period products, bandages, contact lens solution. Stockpile if you have leftover balance.

What's the difference between FSA carryover and grace period?

Carryover lets up to $680 roll into the next plan year permanently. Grace period gives you 2.5 extra months (until March 15) to spend the prior year's balance. Plans can offer one or the other, not both.

Do I lose FSA money if I quit my job mid-year?

Generally yes — FSAs are owned by the employer plan, so leaving the job means leaving the FSA. Limited COBRA continuation may apply for healthcare FSAs. Spend down before your last day if you can.

Bottom line

FSA forfeit is preventable. October audit, November appointments, December stockpile. The system works — you just have to remember the deadline.

Or install Caeli and let the alerts do the remembering for you.

TL;DR: Don't forfeit a dollar. Q4 calendar + Caeli alerts = 100% spend rate.