When Is the FSA Open Enrollment Period?

A Flexible Spending Account (FSA) is an employer-sponsored benefit that allows individuals to set aside pre-tax money from their paycheck to cover eligible out-of-pocket healthcare or dependent care expenses. This reduces taxable income, leading to potential tax savings. FSAs help manage costs for items and services not typically covered by health insurance, such as deductibles, copayments, prescription medications, and certain over-the-counter products. The funds contributed to an FSA are typically available at the beginning of the plan year, even before the money has been deducted from paychecks.

Annual Enrollment Period

Enrollment or adjusting contribution amounts for a Flexible Spending Account occurs during the annual open enrollment period. This period is held once a year, often coinciding with the fall season when employees select other benefits. Employers communicate the specific dates for this enrollment window, which can vary but commonly spans several weeks.

During this timeframe, employees decide whether to participate in an FSA or re-enroll for the next plan year. FSA participation does not automatically roll over; a new election must be made annually. The election made during this period is effective for the entire benefit period, usually the calendar year following enrollment.

Employers provide information about FSA options during annual enrollment through their benefits portals, internal communications, or informational sessions. Employees must submit their election by the deadline, as IRS regulations do not allow exceptions if the deadline is missed. The elected amount is deducted from each paycheck throughout the plan year, before taxes.

Qualifying Life Events for Special Enrollment

While the annual open enrollment period is the standard time to make FSA elections, qualifying life events (QLEs) can permit changes outside this window. These events are defined by IRS regulations and allow adjustments to FSA contributions to align with altered needs. The changes permitted must be consistent with the nature of the qualifying life event.

Common qualifying life events include changes in legal marital status, such as marriage, divorce, legal separation, or the death of a spouse. A change in the number of dependents, such as the birth or adoption of a child, or the death of a dependent, also constitutes a QLE. A change in employment status for the employee, spouse, or dependent that affects eligibility for benefits, or a change in a dependent’s eligibility status, can trigger a special enrollment opportunity.

For a QLE to enable an FSA election change, individuals must notify their employer and initiate the change within a specific timeframe following the event. Not all employers offer mid-year changes to FSAs even with a QLE, so checking with a benefits administrator is advisable. The new election amount is available for claims incurred from the effective date of the QLE, though some events like birth or adoption may allow for retroactive changes.

Making Your FSA Election

Once an enrollment period is open, whether annual or due to a qualifying life event, making an FSA election involves careful consideration and specific procedural steps. The initial decision centers on determining the appropriate contribution amount, which requires estimating anticipated out-of-pocket expenses for the upcoming year. There are generally two main types of FSAs: a Health Care FSA for medical, dental, and vision expenses, and a Dependent Care FSA for childcare or adult dependent care costs. Funds cannot be transferred between these two types of accounts.

For a Health Care FSA, estimating expenses involves considering known costs like prescription medications, anticipated doctor visits, and potential needs for dental or vision care. The IRS sets an annual limit for contributions, which was $3,200 for 2024 and $3,300 for 2025. For a Dependent Care FSA, the focus is on expenses like daycare, preschool, or before- and after-school programs for children under 13, or care for incapacitated adult dependents. The household contribution limit for a Dependent Care FSA is $5,000 per year, or $2,500 if married filing separately.

A significant aspect to understand is the “use-it-or-lose-it” rule, where any unspent FSA funds at the end of the plan year are generally forfeited. However, employers may offer a grace period of up to 2.5 months into the new plan year to use remaining funds, or a rollover option allowing a certain amount (e.g., up to $660 for 2025) to be carried into the next year. Employers typically offer one of these options, but not both. This flexibility helps mitigate the forfeiture risk.

The actual process of making the election usually involves accessing the employer’s online benefits portal or submitting paper forms. Employees will navigate to the FSA section, input their desired contribution amount for each type of FSA, and then finalize their selection. It is important to review the election carefully before submission, as changes are generally not permitted once the enrollment period closes, unless a qualifying life event occurs.