What happens to my unused FSA balance?

Your FSA is a prisoner’s dilemma where you choose the stakes. 

Your flexible savings account (FSA) is like a wager you make at the beginning of each year. 

You bet how much you’ll spend on medical costs. 

The company puts in the ante, up to a maximum of $3,400. 

The game begins.

You have one calendar year to spend the money. 

The company has a year to collect it back from you.

If you both follow the plan, you’ll both walk away scot-free, with the taxes you didn’t spend still in your pocket.

But this is the United States, where most employees work at will. So what happens if one of the prisoners rolls on the other before the end of the game?

In January, the company carries the most risk. They’ve put up to $3,400 on the table, and they’re hoping you won’t spend it in time. If they let you go before you can spend it, they keep the money.

But if you front-load your expenses early in the year, you can draw down your full year’s budget before you’ve paid it all back. 

Ka-ching. Free healthcare.

Of course, we all like to think that we’d keep our mouths shut in a prisoner’s dilemma. But do you trust your company to keep its promises?

Employment isn’t something everyone take for granted right now. 

So, no matter what your new year’s plans are, make plans to get the healthcare done that you’ve been procrastinating on. Because your health isn’t the only thing you shouldn’t take for granted.

And don’t forget to spend your 2025 funds before they expire. Here are some stocking stuffer ideas to get started:

1. Decorative Band-Aids

2. Those cool futuristic thermometers that look like squirt guns

3. Biofreeze and Icy Hot, good for a romantic evening with the spouse or a fun prank on the kids

4. Netipot rinse kits, for the least-favorite parent in your life

5. Cough drops, which aren’t all that different from candy canes, if you think about it

6. A blood pressure monitor, like a hug for your bingo wings

7. And the most romantic gift of all -- earplugs

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👋 I'm Claire. I'm the one who sends all those annoying reminders in December about buying sunscreen and Band Aids. Do you want me to send your team annoying emails in December?

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