FSA Grace Period Deadline Is March 15: How to Spend Your FSA Before You Lose It

Your 2025 FSA funds are about to expire. Here's what you need to know, what you can buy, and how to get the documentation you need before it's too late.

The March 15 FSA Grace Period Deadline Is Here

If your employer offers a Flexible Spending Account (FSA) with a grace period, March 15 is your last day to spend your remaining 2025 FSA funds. After that, any unspent balance is forfeited — not back to you, not to a government fund, but to your employer.

This affects millions of Americans. According to data from the Employee Benefit Research Institute (EBRI), roughly half of all FSA holders forfeit money every year, losing an average of $441 per person. In 2022 alone, total FSA forfeitures exceeded $5 billion nationally.

That's money people earned, set aside for their health, and lost because the system made it too hard to spend.

Wait, Do I Have a Grace Period or a Rollover?

Not all FSAs work the same way. Your employer can offer one of two options (but not both):

Grace Period: You get an extra 2.5 months after the plan year ends (typically December 31) to incur new eligible expenses. For calendar-year plans, this means you have until March 15 to spend your remaining 2025 funds. Any balance left after March 15 is forfeited.

Rollover (Carryover): You can carry over up to $660 from your 2025 FSA into 2026 (increasing to $680 for plan years ending in 2026). Anything above that amount is forfeited, but the carryover funds don't have an expiration date within the new plan year.

Not sure which one you have? Check with your HR department or benefits administrator. If you enrolled in an FSA and still have a balance, this matters right now.

The Real Problem Isn't Spending, It's the System

Here's the thing: the reason millions of people make it to mid-March with money still sitting in their FSA is not because they aren't investing in their health. Nobody has ever accused the U.S. healthcare system of being too affordable.

The problem is that the system makes it incredibly difficult to know:

• What qualifies for FSA reimbursement and what doesn't

• Where you can use your FSA card versus where you need to pay out of pocket and file a claim

• What documentation is required — and when you need it

• Which expenses require a Letter of Medical Necessity (LMN) versus which ones are automatically eligible

The IRS defines FSA-eligible expenses as those used for the "diagnosis, cure, mitigation, treatment, or prevention of disease." That sounds straightforward until you realize that many common health and wellness expenses — massage therapy, supplements, fitness programs, acupuncture — require additional documentation to qualify.

This confusion leads to forfeiture. Not because people don't care about their health, but because the system makes it unnecessarily hard to spend their own money on it.

What Can You Actually Spend Your FSA On?

Your FSA funds exist to help you invest in your health — not to collect dust until a deadline forces your hand.

If you don't have medical appointments already on the books in the next 48 hours, think broader. The world of FSA-eligible health and wellness expenses is wider than most people realize.

Eligible Without a Prescription or LMN

These expenses are typically eligible with just a receipt:

• Copays and deductibles for doctor, dentist, and specialist visits

• Prescription medications and insulin

• Over-the-counter (OTC) medications — pain relievers, allergy meds, cold and flu medicine, digestive aids

• First aid supplies — bandages, thermometers, blood pressure monitors

• Vision expenses — prescription glasses, contact lenses, solution, prescription sunglasses

• Dental care — cleanings, fillings, orthodontia

• Mental health services — therapy, counseling, psychiatric visits

• Physical therapy and chiropractic care

• Hearing aids and batteries

• Sunscreen (SPF 15+)

• Menstrual care products — tampons, pads, cups

• COVID-19 home tests and PPE

• Breast pumps and lactation supplies

Potentially Eligible With a Letter of Medical Necessity (LMN)

These expenses may be FSA-eligible, but your benefits administrator will likely require an LMN from a licensed healthcare provider to approve the reimbursement:

• Massage therapy — when prescribed to treat a specific condition like chronic pain, injury recovery, or musculoskeletal issues

• Acupuncture — for treatment of a diagnosed condition

• Gym memberships and fitness programs — when prescribed for a specific medical condition (not general wellness)

• Nutritional supplements and vitamins — when recommended to treat a diagnosed deficiency or condition

• Weight loss programs — when prescribed for a medical condition like obesity

• Ergonomic equipment — standing desks, ergonomic chairs, when medically necessary

• Air purifiers and humidifiers — for respiratory conditions

• Compression garments — for circulatory issues or post-surgical recovery

• Sleep aids and devices — for diagnosed sleep disorders

The key distinction: the expense must be tied to the diagnosis, treatment, or prevention of a specific medical condition. General wellness purchases typically don't qualify without medical documentation linking them to a condition.

What Is a Letter of Medical Necessity (LMN)?

A Letter of Medical Necessity is a document from a licensed healthcare provider that verifies a specific product or service is medically necessary to treat a diagnosed condition. Think of it as a doctor's note for your FSA.

An LMN should include:

1. Your diagnosed medical condition (with ICD-10 code when applicable)

2. The specific treatment being recommended — product name, service, dosage, or frequency

3. Why the treatment is medically necessary for your condition

4. The duration of treatment (typically up to 12 months)

5. The provider's credentials, signature, and date

When Do You Need One?

You need an LMN when the expense falls outside the IRS's standard definition of a qualified medical expense but can still be linked to the treatment of a specific condition. Your FSA administrator makes the final determination, but the LMN is what turns a "no" into an approval.

The Timing Trap

Here's where many people get caught: you need the LMN at the time of purchase, or before. If you buy a product on March 14 and try to get an LMN on March 20, your FSA administrator may deny the claim. The documentation needs to support that the purchase was made for a medical purpose, not retroactively justified.

This is especially important right now. If you're planning to use your remaining FSA funds on an expense that requires an LMN, get the letter first.

How to Spend Your FSA Funds Before March 15

Here's a practical checklist for the next 48 hours:

Step 1: Check your balance. Log into your FSA administrator's portal (WEX, HealthEquity, Optum, etc.) and see what you have left.

Step 2: Review your plan rules. Confirm whether you have a grace period (ending March 15) or a rollover. If you have a rollover and your balance is under $660, you may be in the clear.

Step 3: Prioritize the obvious. Fill prescriptions, buy OTC medications you'll use, order new contacts or glasses, schedule a dental cleaning.

Step 4: Think about broader wellness needs. Have you been dealing with back pain, poor sleep, chronic stress, or digestive issues? These are real conditions that may make additional expenses eligible — with proper documentation.

Step 5: Get your documentation in order. If any planned purchases require an LMN, get it now. Don't wait until after you buy.

Step 6: Keep every receipt. Your FSA administrator may request itemized receipts even for debit card transactions. Save everything.

Need an LMN Fast? Burst Can Help

If you're trying to use your FSA funds before the March 15 deadline and need a Letter of Medical Necessity, we built Burst for exactly this situation.

Burst connects you with a licensed provider who can evaluate your health needs and issue an LMN quickly — so you can use your FSA dollars on qualifying health and wellness expenses before your deadline hits.

Get your Letter of Medical Necessity now →

The Bottom Line

The FSA system was designed to help Americans pay for healthcare with pre-tax dollars. But confusing rules, unclear eligibility, and documentation requirements mean that billions of dollars go unspent every year — money that was earned by workers and forfeited back to employers.

If you have an FSA balance expiring on March 15, don't let confusion be the reason you lose it. These are your dollars. They exist to help you invest in your health. Use them.

Burst helps people get reimbursed for health and wellness expenses through their HSA and FSA. Learn more at getburst.com.

Frequently Asked Questions

What is the FSA grace period deadline for 2025 funds?

For FSA plans that ended December 31, 2025 and offer a grace period, the deadline to incur eligible expenses is March 15, 2026.

What happens to my FSA money after March 15?

Any remaining 2025 FSA funds in a grace period plan are forfeited to your employer after March 15. You cannot get them back.

Can I use my FSA on wellness expenses like massage or supplements?

Many wellness expenses can be FSA-eligible when tied to a diagnosed medical condition and supported by a Letter of Medical Necessity from a licensed provider.

What is a Letter of Medical Necessity?

An LMN is a document from a licensed healthcare provider stating that a specific product or service is medically necessary to treat a diagnosed condition. It's required for certain FSA-eligible expenses that fall outside standard IRS guidelines.

How fast can I get an LMN?

With Burst, you can connect with a licensed provider and receive your LMN quickly — often the same day. Get started at getburst.com/lmn.

What's the difference between an FSA grace period and a rollover?

A grace period gives you until March 15 to spend last year's funds on new expenses. A rollover lets you carry over up to $660 into the next plan year without a deadline. Your employer offers one or the other, not both.

How much FSA money do people lose each year?

According to the Employee Benefit Research Institute, about half of FSA holders forfeit funds annually, with an average loss of $441 per person. National forfeiture totals have exceeded $5 billion in recent years.