Holiday gifts are not the only thing Americans should rush to buy amid the holiday fray.
For many people, Dec. 31 marks the last day to use up any remaining flexible spending account funds. Americans were expected to lose more than $3 billion from FSAs, which expire in days. According to the Employee Benefits Research Institute, the average American with an FSA will lose between $339 to $408 through their employer plans each year.
The deadline creates a frenzy as many FSA holders scramble to spend as much as $2,000 by New Year's Eve to avoid losing funds.
If you don't use it, you will lose it. That phrase applies to many things. And for those with employer sponsored FSA accounts, you are included.
For those with these accounts, funds can be deducted from your paycheck. And that could be a possible reason they aren't monitored as closely as they should be. These pretax contributions from FSA accounts can conveniently come directly out each pay period. They're like health savings accounts, but FSAs tend to have lower contribution limits, and you can't carry over funds.
If you don't use your FSA funds by the Dec. 31 deadline, they are set to end up with your employer.
According to the Employee Benefit Research Institute, around 50% of workers in recent years forfeited some money from their FSA accounts.
Health-E Commerce, a consumer health retail site, says the total amount of money lost to FSA forfeiture is nearly $2 billion a year — although it is difficult to pinpoint an exact figure.
The FSA Store is a website dedicated to selling things that your FSA funds can cover — around 2,500 items in total — and if you buy before 11:59 p.m. on Dec. 31, for most people, your funds from your FSA account will be used.
Amazon and Walmart also have FSA stores that you can take advantage of before that deadline.
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