--- title: This Common FSA Mistake Could Be Costing You Hundreds of Dollars a Year description: Workers forfeited an average of $404 in FSA funds in 2024. Learn why unused money disappears and how to avoid losing yours. authors: - name: Adam Hardy role: Lead Data Reporter url: https://money.com/author/adam-hardy/ bio: Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. Adam’s work has also appeared in Business Insider, Forbes, Nasdaq, The Penny Hoarder, Yahoo! Finance and more than a dozen local and regional newspapers. education: University of South Florida, BA, Magazine Journalism at_money_since: 2021 articles: 511 covers: - Health and Wellness - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology also_seen_in: - The Penny Hoarder - Forbes Advisor - Creative Loafing - The New York Times - The Washington Post - Bloomberg - Harvard Law School - The Federal Register - National Consumer Law Center - CBS News - Becker's Hospital Review - Business Insider - Mother Jones - The Week - Fortune - The Philadelphia Inquirer - National Association of Student Financial Aid Administrators (NAFSAA) - Education Advisory Board (EAB) - The Institute for College Access & Success (TICAS) - This Morning with Gordon Deal - Empower - Reddit social: - https://www.x.com/hardyjournalism - https://www.linkedin.com/in/hardyjournalism/ editors: - name: Katherine Peach role: Associate Editor url: https://money.com/author/katherine-peach/ bio: Katherine Peach is an associate editor with a focus on news and email at Money. She didn’t always intend to write about money. She’s a classically trained pianist who dreamed of becoming an archaeologist. However, in 2007 Katherine began working in financial publishing as an editor for Agora Inc. (Apparently, unearthing ideas about improving your personal finances isn’t such a bad career alternative!) Katherine’s writing and editing work has been featured in Investing Daily, Clever, Investor Junkie, The Palm Beach Letter, Truth & Plenty, Independence Monthly, NICHE, AmericanStyle, AntiqueWeek, Millennial Money, Money Done Right, TheStreet, Sure Dividend and many others. Katherine holds a Bachelor of Arts in Ancient Studies with concentrations in Archaeology and Ancient Languages and a minor in Literature from the University of Maryland, Baltimore County. She is a member of Phi Beta Kappa. education: University of Maryland, Baltimore County at_money_since: 2025 articles: 14 covers: - Health and Wellness - Banking - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Federal Reserve Rate Cuts - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes published: '2026-10-23T15:20:54.000Z' modified: '2026-10-23T15:20:54.000Z' section: Health and Wellness tags: - Health Care - News word_count: 527 canonical: https://money.com/fsa-money-forfeited-how-to-avoid/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Dollar bill and medical equipment](https://img.money.com/2026/10/News-FSA-mistake-workers.jpg) Workers who leave money in their [flexible spending accounts](https://money.com/what-is-a-flexible-spending-account/), or FSAs, are forfeiting hundreds of dollars per year. The typical forfeiture was $404 in 2024, according to the latest data from the nonprofit Employee Benefits Research Institute, or EBRI. That represents a decline of $32 from $436 the previous year but marks the fifth consecutive year of average forfeitures exceeding $400. “The decline in average forfeitures is encouraging,” Jake Spiegel, senior research associate, health and wealth at EBRI, said in a [news release Wednesday](https://www.ebri.org/media/press-releases/content/about-four-in-10-fsa-accountholders-forfeited-unused-funds-to-employers--ebri-finds). “Still, the findings point to opportunities for employers to help workers better … manage unused balances.” FSAs are a popular workplace benefit designed to let workers use pre-tax dollars to offset out-of-pocket healthcare costs, such as copays, [prescription drugs](https://money.com/trumprx-prescription-drug-discount-website/) and other medical expenses. More than 20 million workers are estimated to have a medical FSA. Contributions into the accounts reduce taxable income dollar-for-dollar, and purchases made from FSAs are tax-free. However, key drawbacks include that contributions are set by workers at the beginning of the year and are deducted from subsequent paychecks, requiring account holders to predict out-of-pocket medical expenses upfront. And, crucially, money left over in the account once the spending deadlines pass is forfeited back to the employer. Employers can set their own FSA spending deadlines, but they usually come at the end of the calendar year. In some cases, employers allow a 2.5-month grace period, pushing the ultimate deadline to mid-March. Workers with FSAs should pay careful attention to spending deadlines, grace periods and reimbursement policies to ensure all eligible medical expenses are covered. ## FSA forfeitures add up EBRI’s research, which draws on its database of over 3 million FSA accounts, found that 4 in 10 FSA holders forfeited at least some of their contributions in 2024. Money previously calculated that workers have collectively forfeited [between $4 billion and $5 billion of unspent FSA money](https://money.com/unspent-fsa-money-forfeit/) per year in recent years. Although workers can't recover forfeited funds, the true financial loss is somewhat smaller than the dollar amount left behind, as the contribution to the account already lowered their taxable income. For example, a worker with a 12% federal income tax rate would receive a tax benefit of $120 for contributing $1,000 into an FSA. Assuming the average forfeiture of $404, the net loss would be $284 in this case. For account holders in higher tax brackets, the tax benefit is higher, so it’s possible to forfeit some money and still come out ahead. Regardless, forfeiting any money means the FSA holder is not getting the full benefits they’re entitled to, and the accounts have drawn scrutiny from health policy experts who question whether their tax advantages justify the costs. Sherry Glied, a healthcare researcher and dean of [New York University](https://money.com/best-colleges/profile/new-york-university/)’s graduate school of public service, is an opponent of the accounts. She [co-authored a 2024 study](https://jamanetwork.com/journals/jama-health-forum/fullarticle/2823758?resultClick=1) published by JAMA Health Forum that found the accounts lead to wasteful healthcare spending and represent a significant tax expenditure for the federal government due to the forgone revenue from untaxed income. “FSA provisions certainly incentivize people to spend money on stuff they don't really need,” [Glied previously told Money](https://money.com/unspent-fsa-money-forfeit/). “They are total losers.” ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/fsa-money-forfeited-how-to-avoid/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Health and Wellness", "item": "https://money.com/health-and-wellness/" }, { "@type": "ListItem", "position": 3, "name": "News", "item": "https://money.com/tag/news/" }, { "@type": "ListItem", "position": 4, "name": "This Common FSA Mistake Could Be Costing You Hundreds of Dollars a Year" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/fsa-money-forfeited-how-to-avoid/#webpage", "url": "https://money.com/fsa-money-forfeited-how-to-avoid/", "name": "This Common FSA Mistake Could Be Costing You Hundreds of Dollars a Year", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2026-10-23T15:20:54.000Z", "mainEntity": { "@id": "https://money.com/fsa-money-forfeited-how-to-avoid/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/fsa-money-forfeited-how-to-avoid/#breadcrumb" }, "dateModified": "2026-10-23T15:20:54.000Z" }, { "@type": "NewsArticle", "headline": "This Common FSA Mistake Could Be Costing You Hundreds of Dollars a Year", "articleSection": "Health and Wellness", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2026/10/News-FSA-mistake-workers.jpg", "width": 2880, "height": 1920, "caption": "News-FSA-mistake-workers" } ], "author": [ { "@type": "Person", "name": "Adam Hardy", "url": "https://money.com/author/adam-hardy/", "@id": "https://money.com/author/adam-hardy/#author", "description": "Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. Adam’s work has also appeared in Business Insider, Forbes, Nasdaq, The Penny Hoarder, Yahoo! Finance and more than a dozen local and regional newspapers.", "image": "https://img.money.com/2022/01/a_adam-hardy.jpg?quality=85&w=400&h=440&crop=1", "email": "adam.hardy@money.com", "jobTitle": "Lead Data Reporter", "alumniOf": "University of South Florida, BA, Magazine Journalism", "subjectOf": [ { "@type": "WebPage", "url": "https://www.thepennyhoarder.com/", "name": "The Penny Hoarder" }, { "@type": "WebPage", "url": "https://www.forbes.com/advisor/", "name": "Forbes Advisor" }, { "@type": "WebPage", "url": "https://creativeloafing.com/", "name": "Creative Loafing" }, { "@type": "WebPage", "url": "https://www.nytimes.com/2023/05/01/opinion/biden-trump-harris-2024.html", "name": "The New York Times" }, { "@type": "WebPage", "url": "https://www.washingtonpost.com/opinions/2022/12/26/flexible-spending-account-is-flawed-benefit/", "name": "The Washington Post" }, { "@type": "WebPage", "url": "https://www.bloomberg.com/opinion/articles/2025-09-20/-100-000-h-1b-visa-fee-is-a-gamble-that-could-protect-us-jobs", "name": "Bloomberg" }, { "@type": "WebPage", "url": "https://petrieflom.law.harvard.edu/2024/02/08/whoop-and-the-irs-how-tax-avoidance-helps-health/", "name": "Harvard Law School" }, { "@type": "WebPage", "url": "https://www.federalregister.gov/documents/2025/12/29/2025-23853/weighted-selection-process-for-registrants-and-petitioners-seeking-to-file-cap-subject-h-1b#footnote-33-p60883", "name": "The Federal Register" }, { "@type": "WebPage", "url": "https://www.nclc.org/resources/what-states-can-do-to-stop-credit-reporting-abuses/", "name": "National Consumer Law Center" }, { "@type": "WebPage", "url": "https://www.cbsnews.com/news/open-enrollment-irs-changes-fsa-hsa-flexible-spending-account-health-savings-account-2023/", "name": "CBS News" }, { "@type": "WebPage", "url": "https://www.beckershospitalreview.com/rankings-and-ratings/20-top-us-hospitals-for-2025-per-money/", "name": "Becker's Hospital Review" }, { "@type": "WebPage", "url": "https://www.businessinsider.com/using-chatgpt-ai-write-cover-letters-job-applications-2023-2", "name": "Business Insider" }, { "@type": "WebPage", "url": "https://www.motherjones.com/politics/2026/04/a-major-strike-of-beef-workers-pauses-in-colorado-but-workers-say-the-fight-isnt-over/", "name": "Mother Jones" }, { "@type": "WebPage", "url": "https://theweek.com/business/economy/job-market-frozen-thawing", "name": "The Week" }, { "@type": "WebPage", "url": "https://fortune.com/2023/12/20/workers-lose-money-on-unused-fsa-accounts-deadlines-what-companies-should-do/", "name": "Fortune" }, { "@type": "WebPage", "url": "https://www.inquirer.com/opinion/editorials/liberation-day-tariffs-economy-stock-market-trump-20250401.html", "name": "The Philadelphia Inquirer" }, { "@type": "WebPage", "url": "https://www.nasfaa.org/news-item/37955/Student_Loan_Changes_2026_New_Repayment_Options_Taxable_Forgiveness_and_More_on_the_Way", "name": "National Association of Student Financial Aid Administrators (NAFSAA)" }, { "@type": "WebPage", "url": "https://eab.com/resources/blog/adult-education-blog/graduate-funding-shift-pricing-aid-strategies-aligned/", "name": "Education Advisory Board (EAB)" }, { "@type": "WebPage", "url": "https://ticas.org/california/state-private-loans-protections-blog/", "name": "The Institute for College Access & Success (TICAS)" }, { "@type": "WebPage", "url": "https://thismorningwithgordondeal.com/b/This-Morning-with-Gordon-Deal-August-04,-2026/421564107823081285.html", "name": "This Morning with Gordon Deal" }, { "@type": "WebPage", "url": "https://www.empower.com/the-currency/life/pumpkin-spice-season-spending", "name": "Empower" }, { "@type": "WebPage", "url": "https://www.reddit.com/r/Economics/comments/1va10oa/comment/p0i9bju/", "name": "Reddit" } ], "sameAs": [ "https://www.x.com/hardyjournalism", "https://www.linkedin.com/in/hardyjournalism/" ], "worksFor": { "@id": "https://money.com/#organization" } } ], "publisher": "https://money.com/#organization", "datePublished": "2026-10-23T15:20:54.000Z", "description": "Workers forfeited an average of $404 in FSA funds in 2024. Learn why unused money disappears and how to avoid losing yours.", "abstract": "Workers forfeited an average of $404 in FSA funds in 2024. Learn why unused money disappears and how to avoid losing yours.", "@id": "https://money.com/fsa-money-forfeited-how-to-avoid/", "inLanguage": "en-US", "dateModified": "2026-10-23T15:20:54.000Z", "editor": [ { "@type": "Person", "name": "Katherine Peach", "url": "https://money.com/author/katherine-peach/", "@id": "https://money.com/author/katherine-peach/#author", "description": "Katherine Peach is an associate editor with a focus on news and email at Money. She didn’t always intend to write about money. She’s a classically trained pianist who dreamed of becoming an archaeologist. However, in 2007 Katherine began working in financial publishing as an editor for Agora Inc. (Apparently, unearthing ideas about improving your personal finances isn’t such a bad career alternative!)\r\n\r\nKatherine’s writing and editing work has been featured in Investing Daily, Clever, Investor Junkie, The Palm Beach Letter, Truth & Plenty, Independence Monthly, NICHE, AmericanStyle, AntiqueWeek, Millennial Money, Money Done Right, TheStreet, Sure Dividend and many others.\r\n\r\nKatherine holds a Bachelor of Arts in Ancient Studies with concentrations in Archaeology and Ancient Languages and a minor in Literature from the University of Maryland, Baltimore County. She is a member of Phi Beta Kappa.", "jobTitle": "Associate Editor", "alumniOf": "University of Maryland, Baltimore County", "worksFor": { "@id": "https://money.com/#organization" } } ], "wordCount": 527, "keywords": [ "Health Care", "News" ], "about": [ { "@type": "Thing", "name": "Health", "sameAs": [ "https://en.wikipedia.org/wiki/Health" ] } ] } ] } ```