As the end of the fiscal year approaches, many Americans face a familiar dilemma: use their remaining Flexible Spending Account (FSA) funds or lose them forever. With the 2025 deadline looming, it’s time to make strategic decisions about those pre-tax dollars you’ve set aside for healthcare expenses.
During a recent healthcare finance conference in Boston, I witnessed firsthand the confusion many participants expressed about maximizing their FSA benefits. “I always end up scrambling in December,” confessed one attendee, a sentiment echoed by many others in the room.
This year-end scramble isn’t uncommon. According to the Employee Benefits Research Institute, Americans forfeit approximately $400 million in FSA funds annually because they miss spending deadlines or don’t fully understand what’s covered. Let’s ensure your hard-earned money doesn’t join that statistic.
FSA deadlines typically fall on December 31st, though some employers offer grace periods extending into March 2025 or allow carryovers up to $610. As Christine Keller, principal at Groom Law Group and employee benefits specialist, explains, “The specific deadline depends entirely on your employer’s plan design—some offer grace periods, others permit limited rollovers, and some enforce a strict use-it-or-lose-it policy.”
Before making purchases, verify your exact deadline with your HR department or benefits administrator. This simple step can save considerable frustration and potential financial loss.
With your deadline confirmed, it’s time to explore your options. The most obvious approach is addressing postponed medical procedures or check-ups. Schedule that dental cleaning, eye exam, or physical therapy session you’ve been delaying. These essential health services not only use your FSA funds effectively but also contribute to your overall wellbeing.
Beyond medical appointments, the IRS allows FSA funds for an impressive range of products. The CARES Act of 2020 permanently expanded this list to include over-the-counter medications without requiring prescriptions, opening additional avenues for your remaining balance.
When I visited my local pharmacy last December, I discovered their dedicated “FSA Eligible” section had expanded considerably. Products ranging from pain relievers and allergy medications to first aid supplies and diagnostic tests were all fair game for FSA spending.
Dr. Carolyn McClanahan, a physician-turned-financial planner at Life Planning Partners, advises, “Many people don’t realize that everyday health essentials like sunscreen with SPF 15+, contact lens solution, and blood pressure monitors qualify for FSA reimbursement. These practical purchases can help you maximize funds while supporting your health.”
The FSA Store, an online retailer specializing in FSA-eligible products, reports that their most popular items during deadline season include thermometers, blood pressure monitors, and TENS units for pain relief. These higher-ticket items can quickly address substantial remaining balances.
For parents, consider stocking up on children’s medications, band-aids with cartoon characters, and kid-friendly thermometers. These family essentials inevitably run low throughout the year, and having backups ready can provide peace of mind during unexpected illnesses.
According to FSA administrator WageWorks, vision-related expenses represent another significant opportunity. Prescription eyeglasses, reading glasses, contact lenses, and even prescription sunglasses qualify for FSA funds. If you’ve been considering updating your eyewear, now might be the perfect time.
The expanded definition of qualified expenses now also covers menstrual care products. Period pads, tampons, menstrual cups, and period underwear are all eligible purchases—a welcome change that acknowledges these as legitimate healthcare needs.
For those with larger remaining balances, consider more substantial healthcare investments. “Acupuncture, chiropractic treatments, and certain fertility treatments can be excellent uses of FSA funds, particularly for individuals dealing with chronic pain or family planning,” notes Shobin Uralil, co-founder of Lively, a Health Savings Account platform.
When reviewing my own options last December, I realized I had nearly $800 left in my account with just weeks before my deadline. After researching eligible expenses, I invested in a high-quality blood pressure monitor, stocked up on contact lenses for the coming year, and scheduled a dermatology appointment I’d been postponing. These strategic purchases not only depleted my balance but also addressed genuine health needs.
Remember that FSA funds can cover a wide range of therapeutic devices. From heating pads and cold therapy wraps to specialized orthopedic supports, these items address specific conditions while helping you manage larger remaining balances.
For 2025 specifically, one noteworthy development is the continuing coverage of COVID-related items. At-home COVID tests, masks, hand sanitizers, and air purifiers (with a Letter of Medical Necessity) remain eligible expenses under most FSA plans.
As Rachel Rouleau, Vice President of Compliance at Health-E Commerce, points out, “Many consumers don’t realize that FSA funds can cover travel costs related to medical care. If you’re traveling more than 50 miles from home for medical treatment, keep those receipts for transportation, lodging, and meals—they might qualify.”
While December often brings the most urgent deadline pressure, take this opportunity to develop a year-round strategy for 2025. Setting calendar reminders every quarter can help you systematically use your funds throughout the year, reducing the stress of last-minute spending.
The key to successful FSA management lies in understanding your specific plan rules and eligible expenses. With thoughtful planning, your FSA can be transformed from a potential source of year-end stress to a valuable tool for supporting your health while maximizing your pre-tax dollars.
