How Much FSA Money Do Americans Forfeit Every Year?

Check eligibility on the go — browse 7,000+ FSA-eligible products in the free app.

The number: billions, every single year

Money's analysis put worker forfeitures at roughly $3 billion in 2019 and $4.2 billion in 2020. Forbes reported the same pattern: billions left on the table, year after year.

The most rigorous look comes from the Employee Benefit Research Institute. Its analysis of 3.2 million flexible spending accounts found that about half of accountholders forfeited money in a given year. Not a rounding error. Half.

And that forfeited money doesn't go to charity or back to you. Under IRS rules it generally reverts to your employer.

Why do half of FSA accounts lose money?

Three reasons, in order of how much damage they do:

• The use-it-or-lose-it rule. An FSA isn't a savings account. Money you don't spend by your plan's deadline is gone. We break the mechanics down in our use-it-or-lose-it guide.
• The deadline sneaks up. Between 40% and 50% of employees miss the typical December 31 cutoff, per CNBC. Many don't even know their plan has a hard date.
• People don't know what's eligible. This is the quiet one. Folks assume there's nothing left to buy, when in reality a huge range of everyday purchases qualify.

The average loss: about $400 a person

Across the studies, the typical forfeiture lands somewhere between $339 and $440 per person per year — EBRI reported an average near $436 in a recent year.

Put that in context: that's real, already-earned, already-taxed-advantaged money. For a household that set aside a few thousand dollars pre-tax to cover medical costs, forfeiting $400 wipes out much of the tax benefit the account was supposed to deliver.

The eligibility blind spot

Here's what trips people up. They think "I don't have any medical expenses left this year" — and forfeit. But the list of FSA-eligible purchases is far broader than most realize.

Surprisingly eligible: sunscreen (SPF 15+), contact lenses and solution, first-aid kits, thermometers, LASIK, and even therapy with a licensed provider. **Surprisingly *not* eligible:** gym memberships and plain daily vitamins, in most cases.

That gap between what people *think* qualifies and what *actually* does is exactly why money gets forfeited. The fastest fix is to check before you assume — our free FSA Eligibility Checker gives you a verdict on any item in one search, and our complete eligible-items guide covers the full list.

How to make sure you're not one of them

You don't need a complicated plan. You need to act before December, not during it.

• Find your deadline type now. Some plans end December 31; others offer a grace period or let you carry over up to $680 into 2026 (only about a third of employers offer carryover). Check which one you have.
• Check eligibility early. Run the items you're considering through the checker in October, not on December 30th.
• Spend by priority. Highest-certainty eligible items first, borderline ones last. Our guide to spending leftover FSA money walks through the order.
• Know what you can buy. Skim what you can actually buy with an FSA so nothing eligible slips past you.

The bottom line

Billions of dollars in FSA funds vanish every year, and about half of all accounts lose something — averaging around $400 a person. Almost none of it has to happen.

The two habits that prevent it: know your deadline, and check what's eligible before you assume you're out of expenses. Do both, and you keep money that's already yours.