how much fsa rolls over 2025

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24-11-2024

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How Much of My FSA Rolls Over in 2025? Understanding Your Flexible Spending Account

Flexible Spending Accounts (FSAs) offer a valuable way to save pre-tax dollars for eligible healthcare and dependent care expenses. However, understanding how much, if any, of your FSA rolls over each year is crucial for maximizing your benefits and avoiding forfeiture. The rules surrounding FSA rollovers have changed, and for 2025, there's a key distinction to make.

The 2025 FSA Rollover Landscape:

Prior to 2020, most FSAs had very limited or no rollover options. However, the CARES Act and subsequent legislation introduced changes that offered greater flexibility, although these are not permanent features. For the 2025 plan year, the rules depend significantly on the type of FSA you have:

• Healthcare FSA: Generally, no rollover is allowed for healthcare FSAs in 2025. Any money remaining in your healthcare FSA at the end of the plan year (typically December 31st) is forfeited. This is the standard rule unless your employer specifically offers a grace period or a limited rollover option. Check your plan documents carefully. Some employers may offer a limited rollover option (often up to $610 for 2025), but this is at their discretion and is not a guaranteed feature.

• Dependent Care FSA: The rules for dependent care FSAs are also generally restrictive regarding rollovers. Unlike healthcare FSAs, dependent care FSAs typically don’t offer grace periods or rollover provisions. Therefore, unused funds in your dependent care FSA at the end of the plan year are usually lost. Again, review your employer's plan documents for any specific exceptions.

Understanding Grace Periods and Limited Rollovers:

While the standard rule for 2025 is generally no rollover for healthcare FSAs and no rollover for dependent care FSAs, some employers may offer:

• Grace Period: This allows you to use funds from your FSA for a short period (usually two and a half months) after the plan year ends. This extends your window to use the money, reducing the likelihood of forfeiture. However, this grace period only applies if your employer offers it explicitly.

• Limited Rollover: As mentioned above, a limited rollover may be offered for healthcare FSAs, typically capped at a specific dollar amount. This is exceptionally rare for dependent care FSAs.

What to Do Now:

1. Consult your plan documents: The most accurate information regarding your 2025 FSA rollover options is found in the official plan documents provided by your employer. Look for sections detailing rollover provisions, grace periods, and the plan year's end date.

2. Contact your HR department: If you have questions about your FSA plan or cannot locate relevant information in your plan documents, contact your Human Resources department for clarification.

3. Project your spending: Carefully estimate your eligible healthcare and dependent care expenses for the year. Avoid contributing more to your FSA than you anticipate needing to use to minimize potential forfeiture.

In short: For 2025, the standard rule is that you will not be able to roll over funds from your healthcare FSA or dependent care FSA. However, your employer may offer a grace period or limited rollover, so it is imperative to check your plan documents for specifics relevant to your situation. Don't assume anything – proactive planning is key to preventing the loss of your hard-earned pre-tax dollars.