Money put in FSAs is available on a “use or lose” basis and thus using these accounts to your best advantage requires some planning.
Any money remaining in a dependent care account after payment of all claims covering that plan year, plus a 2 1⁄2 month “grace period” into the following calendar year is forfeited.
In a health care account, up to $500 can be carried from one year to the next, so long as you have such an account in the subsequent year. Any leftover above that amount, or the total unused in one year if you do not have such a plan the following year, is forfeited. Note: Until the 2015 plan year, the grace period policy applied to health care accounts as well, and there was no rollover feature.
However, the entire amount in health care accounts is available from the start of a plan year, regardless of how much you have put in through payroll withholding. You could use up the entire amount available in the account and leave employment with no obligation to pay back the difference between what was paid in and what was drawn out in that plan year.
Money in a dependent care account is available on an accrual basis. Claims cannot exceed what you contributed to that account in the plan year at the date of the claim submission.