Every January, millions of people put money into a flexible spending account with good intentions. Every December, a big chunk of them realize they never got around to spending it. Then the money goes back to their employer.
That isn’t a guess. The Employee Benefit Research Institute released new numbers on October 22, 2026, from its database of more than 3.3 million FSAs. In 2024, about 40% of account holders forfeited unused money, and the ones who forfeited lost an average of $404, according to 401(k) Specialist’s write-up of the EBRI findings. That’s an improvement. The average forfeiture was $436 the year before, and EBRI says the 2024 figure is the lowest since it started tracking in 2019, after adjusting for inflation.
Still, $404 is real money. It’s a car insurance payment, or a week of groceries for a family, or most of a new pair of prescription glasses. And it was already yours, set aside from your paycheck before taxes. If you have an FSA balance sitting there right now, the next nine weeks are when you decide whether you keep it.
Why FSA money disappears in the first place
A health care FSA lets you set aside part of your salary before income and payroll taxes, then use it for qualified medical, dental, and vision costs. For plan years starting in 2026, you can contribute up to $3,400, according to Newfront’s summary of the IRS limits.
The catch is the use-it-or-lose-it rule. Unlike a health savings account, which is yours forever, an FSA is tied to a plan year. Whatever you don’t spend by the deadline gets forfeited. Your employer is allowed to soften that rule in one of two ways, but not both. It can let you carry over a limited amount into next year (up to $680 from a 2026 plan year into 2027), or it can give you a grace period of up to two and a half months after the plan year ends to keep spending. Some plans offer neither. HealthCare.gov’s FSA page lays out both options.
So step one is boring but important: find out which version you have. Log in to your benefits portal or check your summary plan description. If your plan has a calendar year with no grace period, December 31 is a hard wall. If it has a grace period, you may have until March 15. If it has a carryover, you only need to spend down to $680, and anything above that is what’s at risk.
While you’re in there, look for the runout period too. That’s the window your plan gives you to submit claims for expenses you already had before the deadline. It’s separate from the spending deadline, and people mix the two up all the time.
Start with care you were going to get anyway
The easiest way to use an FSA balance is to stop putting off appointments. A lot of us delay the dentist or the eye exam because of the out-of-pocket cost. If the money is already sitting in an FSA, that excuse is gone.
Eye care is probably the single best FSA spend. An eye exam, prescription glasses, prescription sunglasses, and contact lenses all generally count as medical expenses under IRS Publication 502. If your glasses are two prescriptions old, this is your sign. Same with a backup pair. You can also stock up on a year of contacts in one order, which usually costs less per box anyway.
Dental work that isn’t cosmetic is another big one. Fillings, crowns, and the part of a cleaning your insurance didn’t cover all qualify. If your dentist mentioned something “we should keep an eye on” at your last visit, getting it handled before the deadline uses FSA dollars that would otherwise vanish.
The calendar is tight, though. December appointments fill up fast, partly because so many other people are doing exactly this. If you’re going to book, book this week.
The drugstore run that counts
A lot of people miss this one. Since the CARES Act passed in 2020, over-the-counter medicines no longer need a prescription to be FSA eligible, and menstrual care products count too. That opened up a huge list of things you already buy.
Think pain relievers, allergy pills, cold and flu medicine, antacids, and first-aid supplies like bandages. We’re heading into cold and flu season, so stocking the medicine cabinet now isn’t wasteful. You’d buy most of it by February anyway.
A word of caution, because this is where FSA spending can turn into a different kind of waste. Buying $300 of stuff you’ll never use just to “use up” the account isn’t a win. You’ve traded money for clutter. The goal is to pull forward purchases you’d make in the next few months regardless. If the honest answer is that you won’t use it, it’s better to skip it and lower next year’s election.
Bigger items worth checking
If you have a larger balance, a few purchases can absorb it in one shot. A blood pressure monitor, a prescribed hearing aid, or a CPAP supply refresh are common examples. Some items need a letter of medical necessity from your doctor, so check with your plan administrator before you buy anything expensive. Getting a claim denied in late December is a bad time to learn that rule.
Keep your receipts, even if you paid with the FSA debit card. Administrators often ask for documentation after the fact, and if you can’t provide it, the card can get suspended or the charge can be treated as taxable. Snapping a photo of each receipt takes five seconds.
Interestingly, EBRI’s research has found that people who submitted at least one claim manually tended to forfeit less. Our guess is that it’s because the act of filing a claim makes you check your balance. Whatever the reason, looking at the number regularly seems to help.
Use open enrollment to fix next year
Most employers run open enrollment in the fall, so you may be picking your 2027 FSA amount right now. This is where you prevent next December’s scramble.
Instead of choosing a round number, look at what you actually spent this year on things like copays, prescriptions, eye care, and dental. If you spent $900 and you elected $1,500, cut back. If you know a big expense is coming, like braces for a kid or a planned procedure, you can go higher with confidence. EBRI found average contributions were $1,431 in 2024, but the right number for you is whatever your real spending supports, not the average.
It’s also worth knowing what happens if you leave your job. In most cases, unspent FSA money is forfeited when you separate from your employer unless you continue the account through COBRA. If you’re planning a job change in 2027, keep your election on the low side.
If you have a dependent care FSA for child care, that’s a separate account with separate rules. The 2026 limit is $7,500, and its deadlines and eligible expenses don’t match the health FSA, so check those on their own.
What we’d do this week
If we had an FSA balance today, here’s the order we’d go in. Log in and write down three things: your current balance, your plan’s deadline, and whether you have a carryover or grace period. Then book any eye or dental appointment you’ve been meaning to make. After that, make a short list of the over-the-counter basics your household goes through, and buy those with the FSA card. Finally, take your actual 2026 spending into open enrollment and set your 2027 number from that.
None of this is exciting. But spending an hour on it could keep a few hundred dollars from going back to your employer, and that’s a better return than most savings accounts will give you this year.
