The March 15th FSA Deadline: How to Spend Down Remaining Balances
If your employer's plan year ended on December 31st and includes an optional 2.5-month Grace Period, midnight on March 15th is the absolute deadline to incur new eligible expenses.
Under IRS Section 125 rules, any unused balance remaining after your plan's deadline is forfeited back to your plan sponsor. Understanding the exact difference between your plan's spending cutoff date and paperwork run-out deadline is essential to protect your hard-earned pre-tax money.
1. Grace Period vs. Run-Out Period vs. Rollover
Employers may adopt one of two statutory relief provisions to mitigate the strict IRS "use-it-or-lose-it" rule. Check your Summary Plan Description (SPD) to identify which rule applies to your account:
| FSA Plan Provision | Spending Deadline | Paperwork Filing Deadline | Unused Balance Impact |
|---|---|---|---|
| Standard Plan (No Extension) | December 31 | Run-Out Period (Typically March 31) | 100% Forfeited if unspent by Dec 31 |
| Grace Period (2.5 Months) | March 15 | Run-Out Period (Typically March 31 / April 30) | Unspent funds forfeit after March 15 |
| Carryover / Rollover Rule | December 31 | Run-Out Period (Typically March 31) | Up to IRS statutory limit ($640–$660) rolls over automatically |
The "Date of Purchase" Rule
To count against your prior-year grace period balance, eligible items must be purchased and charged before midnight on March 15th. You do not need to consume all supplies by the deadline, but online orders must be finalized and billed by the merchant before the clock expires.
2. High-Utility Health Technology Investments
Avoid panic-spending hundreds of dollars on disposable bandages or duplicate medicine cabinets. Instead, direct remaining funds toward durable, high-value medical appliances and diagnostics that provide lasting utility:
Diagnostic & Heart Health Wearables
Continuous health monitors, connected blood pressure cuffs, pulse oximeters, and qualifying biometric trackers for diagnosed cardiac or respiratory conditions. Pair with our LMN Generator if a doctor's note is required.
Percussive & Heat Therapy Units
FDA-cleared targeted percussion massage devices (such as Theragun) and infrared heating pads for diagnosed chronic musculoskeletal pain, joint rehabilitation, or physical therapy regimens.
Smart Infant Monitoring Systems
Medical-grade baby health monitors, biometric socks (e.g., Owlet), and prescription-grade breast pumps and storage accessories qualify 100% without prescriptions under our FSA Baby Guide.
3. The Over-The-Counter (OTC) Stockpile Strategy
Under the CARES Act, over-the-counter medications and menstrual care products no longer require a prescription. You can immediately spend down remaining balances on routine health essentials:
- Sun Protection: Daily broad-spectrum facial moisturizers and sunscreens rated SPF 15+ (see our Skincare FSA Rules).
- Optical Care: Prescription eyeglasses, prescription sunglasses, contact lenses, and contact lens cleaning solutions.
- Dental Hygiene: Medicated oral rinses, orthodontic wax, and water flossers (review the Braces Guide).
- First Aid Kits & Thermometers: Digital no-touch infrared thermometers and comprehensive emergency trauma packs.
Explore pre-screened items available for immediate fulfillment in the BenefitExplained Store.
Are you leaking money in payroll taxes?
While spending down prior-year balances, make sure your ongoing pre-tax elections are calibrated properly. Use our free tool to audit your paycheck deductions.
Run 60-Second Tax Audit ➔4. Critical End-of-Deadline Action Checklist
- Confirm Your Available Balance: Log into your TPA dashboard (Alight, HealthEquity, WEX, Optum) to verify the exact unspent dollar amount.
- Verify Plan Rules: Confirm with HR whether your plan uses the March 15 Grace Period or the Carryover Rule (employers cannot legally offer both).
- Place Orders Early: Avoid server crashes and credit card settlement delays on deadline night by placing merchant orders ahead of March 15.
- Submit All Receipts by the Run-Out Date: Upload itemized receipts and EOB statements before the final Run-Out cutoff (typically March 31 or April 30).