What is an FSA rollover?
FSA plans are required to operate with a “Use-it-or-Lose-it” rule. Originally, this applied to all FSA funds. However, the regulatory authorities amended the original Use-it-or-Lose-it rule to allow some funds to rollover at the end of the plan year.
For example, if you elected to contribute $2,700 this year, but only spent $2,300, you could carry over the remaining $400 to use next year. Keep in mind, if you only spent $2,000, you could still carry over $500, but you would lose the remaining $200.
Does my plan allow for a rollover?
The rollover feature is only available on some Health FSA accounts. Please refer to your Plan Fact Sheet to confirm if your Health FSA plan allows for a rollover.
Rollovers can only be processed for the prior year after the Claims Submission Deadline. This is because time must be allowed for all claims from the prior year to be processed before confirming any remaining amount to rollover. Rollover processing typically occurs approximately one month after the Claims Submission Deadline, between April 15th and May 1st. Once the rollover is processed, those funds will be available for the current plan year, including reimbursements for dates of service from the start of the current plan year.
Do rollovers rollover?
Yes. If you have a rollover from a prior year and do not actually incur any claims in the current year, your rollover will continue to rollover to future plan years.
The rollover feature is not compatible with the grace period feature for FSAs. Therefore, your plan would not have both.