Tips from FSA Store will help the estimated 37% of FSA users who have a grace period deadline avoid forfeiting unused funds
DALLAS, Jan. 30, 2024 /PRNewswire-PRWeb/ -- Saving money and reducing taxes is a common financial goal for consumers, and roughly 35 million people are enrolled in flexible spending accounts (FSAs) to help them achieve these goals while protecting their personal health. Unfortunately, 40% of FSA users will forfeit unused funds to a missed deadline. FSA Store® is here to help with education and tips about the upcoming March 15 FSA grace period deadline.
According to a survey by VISA, 37% of FSA users have a grace period deadline, which means they have an extra opportunity to spend remaining FSA dollars. However, if they are unaware of the deadline or what's eligible for reimbursement with these tax-free funds, they may lose money instead of saving.
FSA Store, which is part of the Health-E Commerce® family of brands, is the first and leading online store to sell only FSA-eligible items. To help consumers avoid forfeiting unused FSA funds to this missed deadline, FSA Store is sharing these important FSA grace period facts.
- A grace period allows account holders to incur new expenses against remaining 2023 FSA dollars: The FSA grace period gives consumers the flexibility to incur new expenses against prior year FSA funds. For example, someone with a December 31, 2023 FSA deadline and a grace period would have until March 15, 2024 to spend down remaining funds from their 2023 FSA.
- Not everyone has a grace period extension: A grace period is an optional deadline that an employer can choose to offer. Consumers should check with their FSA administrator or HR department to confirm if they have a remaining prior year plan balance and if their employer offers a grace period extension or any other optional account features.
- Your grace period deadline may not be March 15: For benefit plans that run on a calendar year and that end December 31, the grace period deadline is March 15. However, for FSA plans that do not renew on January 1, the grace period is 2.5 months after the end of their plan year.
- FSA eligibility is extensive, and includes thousands of everyday health items. FSA funds can be used to pay for a wide variety of clinical services, doctor appointments, prescription medications, and thousands of everyday health products that consumers are already buying with out-of-pocket funds. FSA Store estimates that the average household spends $1,600 each year on items that could be purchased with these tax-free funds.
- FSA funds that are not spent by the grace period deadline may be forfeited. For consumers who have a March 15 grace period deadline, any funds not spent in the account after this date will be forfeited. Some account holders may be able to submit claims for expenses already incurred prior to December 31, 2023, through March 31, 2024, if they have an FSA run-out period option. FSAs that have a different grace period date are also subject to forfeiture, if funds are not spent by that plan's grace period deadline. FSA Store estimates that more than $1 billion in funds are forfeiting each year to a missed FSA deadline.
It's important to note that an employer may offer a grace period extension or a partial carryover option of unused FSA funds from one year to the next, but they may not offer both options and employers are not required to offer either option.
Explore the searchable eligibility list at FSA Store and spend FSA funds before March 15, or learn more about the FSA grace period in our Learning Center.
About Health-E Commerce
Health-E Commerce is the parent brand to FSA Store and HSA Store, online stores that serve the 70+ million consumers enrolled in pre-tax health and wellness accounts. The company also created Caring Mill, a popular private-label line of health products through which a portion of every purchase is donated to the Children's Health Fund. Since 2010, the Health-E Commerce brands have led the direct-to-consumer e-commerce market for exclusively pre-tax health and wellness benefits. Health-E Commerce plays an essential role in expanding product eligibility for important new categories within the list of eligible medical expenses.
Media Contact
Barbara Tabor, FSA Store, 6512309192, [email protected], www.FSAStore.com
SOURCE FSA Store
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