Can I Contribute to an FSA After Age 65? Medicare, Limits, Retirement

Yes, you can make FSA contributions after age 65. Federal law sets no upper age limit on health care flexible spending accounts, and enrolling in Medicare does not disqualify you the way it disqualifies you from an HSA. For plan years beginning in 2026, you can route up to $3,400 in pre-tax salary into an employer’s health FSA while collecting Medicare benefits.¹

Age Is Not an Eligibility Factor

The tax code section that governs FSAs, Internal Revenue Code Section 125, contains no maximum age for participation. It allows employers to exclude workers under 21 from simplified cafeteria plans, but nothing in the statute bars older employees.² The real eligibility test is employment. If you receive a W-2 and your employer maintains a cafeteria plan with an FSA option, you qualify.

Because FSAs are employer-sponsored, they are unavailable if you are fully retired or self-employed.³ But as long as you remain on payroll, your age has no bearing on whether you can participate.

Medicare Does Not Block You

This is where the FSA rules diverge sharply from HSA rules. Under Section 223, HSA contributions must stop the first month you become entitled to Medicare, which trips up many people automatically enrolled in Part A at 65.⁴ Health FSAs have no equivalent restriction. You can be enrolled in Part A, Part B, a Medicare Advantage plan, or Part D and still fund your employer’s FSA.

Section 125 simply does not mention Medicare. It requires that participants be employees and that the plan offer a choice among qualified benefits, and it never conditions eligibility on the absence of other government coverage.² The legal framework treats your FSA and your Medicare enrollment as separate systems.

Coordinating Claims So You Don’t Double-Dip

Running both programs at once requires some bookkeeping. You cannot seek reimbursement for the same expense from both Medicare and your FSA. When you submit an FSA claim, you typically certify that the expense has not been covered by your insurance.⁵ In practice, you use the FSA for the portion Medicare leaves behind: deductibles, copayments, coinsurance, and services Medicare does not cover at all.

Keep your Medicare Explanation of Benefits statements alongside your FSA reimbursement receipts. Clear documentation of who paid for what protects the tax-free status of your FSA distributions if you are ever audited.

2026 Limits and the Use-It-or-Lose-It Risk

For 2026 plan years, the IRS allows employees to contribute up to $3,400 through pre-tax salary reductions.¹ Your employer may set a lower cap, so check your plan documents. Contributions come out of each paycheck in equal installments, reducing your taxable income along the way.

FSAs generally operate on a use-it-or-lose-it basis. Money left unspent at the end of the plan year is forfeited.³ Employers can soften this rule with one of two options, but not both:

A grace period of up to two and a half months after the plan year ends, during which you can incur and claim expenses against the prior year’s balance.
A carryover of unused funds into the next plan year, capped at $680 for 2026.⁶

Not every employer adopts either provision, so some plans forfeit leftover balances entirely.³ Check yours before deciding how much to elect. Over-funding an FSA when you are close to retirement is one of the costliest mistakes at this stage of a career.

Where FSA Dollars Do the Most Good After 65

The real value of an FSA after 65 is filling the gaps Medicare leaves. FSA funds can go toward any expense that qualifies as medical care under the tax code, and several categories matter especially for older workers.⁷

Hearing aids, batteries, repairs, and maintenance. Original Medicare does not cover hearing aids, making this one of the most valuable FSA uses at this age.⁷
Dental care, including crowns, bridges, dentures, and routine cleanings. Medicare generally does not cover dental services.
Vision care, including eyeglasses, contact lenses, and exams beyond what Medicare covers.
Copayments, coinsurance, and deductibles that Medicare leaves on your side of the ledger.⁵
Durable medical equipment such as walkers, wheelchairs, and blood sugar monitors, rented or purchased.⁸
Prescription drug copayments under Part D, or the full cost of medications not on your plan’s formulary.

One important exclusion: insurance premiums are not FSA-eligible. That includes Medicare Part B and Part D premiums and Medigap policy premiums.⁵ FSA funds cover direct medical costs, not the insurance that helps pay those costs.

What Happens to the Balance When You Retire

FSA coverage typically ends the day your employment ends. Unlike an HSA, which you own outright and keep forever, an FSA is tied to your employer’s plan. Once you leave, contributions stop and access to any remaining balance closes after a short claims window.

Most plans give departing employees a run-out period to submit reimbursement claims for expenses incurred before the termination date. The length varies by employer, commonly running 60 to 90 days. You cannot use the FSA for expenses that arise after your last day of work. Any balance left unclaimed after the run-out period is forfeited to the plan.

COBRA continuation is technically available for a health FSA, but electing it rarely makes financial sense. You would pay the full contribution amount with after-tax dollars, plus a 2% administrative fee, which erases the tax advantage. The narrow exception is when you front-loaded contributions early in the year and still have a large unreimbursed balance, where a small COBRA payment could unlock reimbursements exceeding what you pay in.

Sizing Your Election in Your Final Working Years

The combination of Medicare coverage and an FSA creates a real financial advantage, but only if you use it deliberately.

Schedule elective but necessary care within your plan year. Dental work, new eyeglasses, and hearing aid fittings are all expenses you can time. If you know a crown or a new pair of progressive lenses is coming, get the work done while your FSA balance is available. Use your prior-year Medicare out-of-pocket costs as a baseline: last year’s Part B deductible, specialist copayments, and prescription copays are a reasonable estimate for next year’s election.

If retirement is on the horizon, reduce your final-year contribution to match only the expenses you expect before your last day. The use-it-or-lose-it rule is unforgiving. An FSA works best as a short-term spending tool for predictable costs, not as a savings vehicle, and that distinction matters most when the clock is ticking toward your last paycheck.

1
FSAFEDS. New 2026 Maximum Limit Updates – Message Board
2
Office of the Law Revision Counsel. 26 USC 125 – Cafeteria Plans
3
Internal Revenue Service. Publication 969 – Health Savings Accounts and Other Tax-Favored Health Plans
4
Office of the Law Revision Counsel. 26 USC 223 – Health Savings Accounts
5
HealthCare.gov. Using a Flexible Spending Account (FSA)
6
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
7
Internal Revenue Service. Publication 502 (2025) – Medical and Dental Expenses
8
FSAFEDS. Eligible Health Care FSA (HC FSA) Expenses