FSA Run-Out Periods: Deadlines, Qualifying Expenses, and Claims

An FSA run-out period is the window after your flexible spending account plan year ends during which you can still submit claims for eligible expenses you already incurred during that plan year. Most employers set it at around 90 days, though the actual length is up to your plan and can run anywhere from 30 days to six months. The plan year is closed for spending, but paperwork for expenses that happened inside it is still fair game.

Run-Out Period vs. Grace Period

These two get confused constantly, and the mix-up costs people money. A run-out period extends your paperwork window. A grace period extends your spending window, letting you incur brand-new expenses using last year’s leftover funds for up to two and a half months into the new plan year.¹

A health FSA can offer a grace period, a carryover provision, or neither, but not both a grace period and a carryover in the same plan year.² A run-out period exists on top of any of those options. Even if your plan has a grace period, you still get a separate run-out period afterward to submit remaining paperwork for expenses incurred during both the plan year and the grace period.¹

Finding Your Exact Deadline

Federal law does not set a universal run-out length. Your employer picks it. Ninety days is the most common choice, but plans range from 30 days to six months. The exact figure is in your Summary Plan Description, the document handed out during open enrollment. If you cannot find it, check the benefits portal or call human resources.

When the clock starts depends on your plan year. A calendar-year plan ending December 31 with a 90-day run-out puts the deadline at March 31. A fiscal-year plan starting in July shifts the deadline into the fall. If your plan also has a grace period, the run-out window typically begins after the grace period ends, not after the plan year, pushing the final submission date later.

Treat the deadline as firm. Administrators reject late submissions regardless of the reason, and there is no IRS-mandated exception for missing it.

Which Expenses Qualify

Only expenses incurred during the active plan year, or during the grace period if your plan offers one, can be reimbursed through the run-out window. “Incurred” means the service was provided or the item was purchased during that time. A dental visit on November 15 of the plan year qualifies. A dental visit on January 20 of the following year does not, unless a grace period covers that date.

What qualifies as an eligible expense depends on the account type. Health care FSAs reimburse medical, dental, and vision expenses that qualify under Section 213(d) of the Internal Revenue Code.³ Dependent care FSAs cover child care and elder care costs that allow you or your spouse to work. Run-out rules apply the same way to both.

Documentation You’ll Need

The IRS requires independent third-party verification for every FSA claim. Self-certification does not count.⁴ Acceptable documentation includes an Explanation of Benefits from your insurer or an itemized receipt from the provider, showing the date of service, a description of the service or product, and the amount you owe. A credit card statement or a handwritten note will not meet the standard.

Cleaning Up Debit Card Transactions

If you used an FSA debit card during the plan year, some transactions were automatically substantiated. IRS guidance allows several auto-substantiation methods:

Copay matching, where the transaction equals your plan’s copay or up to five times that amount.
Recurring expenses that match a previously substantiated charge in amount, provider, and timing.
Point-of-sale verification by the merchant or pharmacy benefit manager.
Inventory system approval at pharmacies and retailers with compliant systems.⁴

Transactions that did not fit any of those get flagged as “receipt required.” Your administrator will have sent you a notice. The run-out period is exactly when to resolve these. Ignoring receipt-required notices can lead to a deactivated card or an offset against future claims.

Filing a Claim for Out-of-Pocket Expenses

For expenses you paid out of pocket, submit a claim form through your administrator’s portal or app. Each line should correspond to one service or purchase. Copy details straight from the EOB or receipt: provider name, date of service, description, and amount. Complete forms process faster and leave more of your run-out window intact if something has to be corrected.

How to Submit

Most third-party administrators accept claims through an online portal or mobile app, where you upload scans or photos of receipts. Some still accept mail, but transit time eats into your deadline. If you do mail, use a trackable method.

Save the confirmation. That receipt is your proof the claim arrived inside the run-out window if a dispute comes up later. Processing times vary. Some federal program administrators turn claims around in one to two business days;⁵ private administrators may take longer, especially at year-end peak. Submit well before the deadline, not on it.

Approved claims pay out by direct deposit or check depending on your account settings. If a claim is denied, the notice will give a reason code. Most denials come down to missing receipts, mismatched dates, or duplicate submissions, and you can fix and resubmit as long as time remains.

What Happens to Unused Funds

Once the run-out period closes, remaining health FSA funds are subject to the use-or-lose rule under Section 125 regulations.² Money you did not claim for eligible expenses is forfeited. It does not come back as cash and cannot be moved to a personal account. Your plan may offer one of two ways to preserve some of it.

Carryover

Plans with a carryover provision let you roll a limited amount of unused health FSA funds into the next plan year. For the 2025 plan year rolling into 2026, the maximum carryover is $660. For the 2026 plan year rolling into 2027, it rises to $680.⁶ Anything above the cap is still forfeited. Carryover is separate from the run-out period: carryover preserves unspent funds for future use, while the run-out period gives you time to file claims for past expenses.

Grace Period

Plans with a grace period instead let you spend the full remaining balance on new eligible expenses for up to two and a half months into the new plan year.¹ There is no dollar cap on grace period spending, but a plan cannot pair a grace period with a carryover for health FSAs.

Neither Option

Plans that offer neither follow pure use-or-lose. Anything unspent when the run-out period closes is gone. Forfeited balances stay with the plan and are commonly used to offset administrative costs. The IRS does not prescribe exactly how forfeitures must be applied, but they cannot be returned to individual participants as cash.

The health FSA contribution limit is $3,300 for 2025 and $3,400 for 2026, which is enough to make forfeiture sting. Electing based on realistic expected expenses rather than the maximum is the cleanest way to avoid leaving money behind.

One boundary worth flagging: if you are transitioning from a general-purpose health FSA to an HSA-eligible high-deductible plan, the run-out period itself does not disqualify you from HSA contributions because it only covers filing claims for past expenses. An active grace period can disqualify you, unless your FSA balance at year-end is zero.⁷

If You Leave Your Job Before the Plan Year Ends

Separation changes the picture. For health care FSAs, the account typically terminates on your last day. You can still submit claims during the run-out period, but only for expenses incurred before you left.⁸ New expenses after your separation date are not reimbursable, even with an unused balance.

Dependent care FSAs work differently. After separation, the remaining balance can still reimburse eligible expenses through the end of the calendar year, as long as funds remain.⁸

COBRA is one way to keep a health FSA active after separation, if your employer has 20 or more employees. You continue contributions on an after-tax basis and can spend from the account for the rest of the plan year. It only makes financial sense if the account is underspent, meaning you have used less than you have contributed. Employers can also charge up to 102 percent of the administrative cost. Unused amounts at separation are otherwise forfeited unless you elect COBRA.²

If a Claim Is Denied

Most run-out denials come from fixable problems: a missing receipt, a date outside the plan year, or a duplicate submission. Correct it and resubmit if time remains in the window. That is faster than a formal appeal.

For genuine disputes, federal rules give you at least 180 days from the date you receive the denial notice to file an appeal. The notice must explain the reason for denial and the steps for appealing, and you can request copies of records the plan used at no charge.⁹ The appeal reviewer must be someone different from the person who issued the denial and cannot be their subordinate; medical judgments require consultation with a qualified medical professional. For post-service claims, which most run-out submissions are, the plan has up to 30 days at each level of review to decide.¹⁰

1
Internal Revenue Service. Notice 2005-42 – Modification of Application of Rule Prohibiting Deferred Compensation Under a Cafeteria Plan
2
Internal Revenue Service. Notice 2013-71 – Modification of Use-or-Lose Rule for Health Flexible Spending Arrangements
3
Office of the Law Revision Counsel. 26 USC 125 – Cafeteria Plans
4
Internal Revenue Service. Notice 2006-69 – Amounts Received Under Accident and Health Plans
5
FSAFEDS. How Long Will It Take to Receive Reimbursement
6
FSAFEDS. New 2026 Maximum Limit Updates
7
Internal Revenue Service. Publication 969 – Health Savings Accounts and Other Tax-Favored Health Plans
8
FSAFEDS. What Happens if I Separate or Retire Before the End of the Plan Year
9
U.S. Department of Labor. Filing a Claim for Your Health Benefits
10
U.S. Department of Labor. Benefit Claims Procedure Regulation FAQs