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Health flexible spending accounts, or FSAs<\/a>, are tax-advantaged accounts that let workers set aside pretax money to cover eligible health expenses. However, they’re often use it or lose it, with unspent balances<\/a> forfeited at the end of the plan year.<\/p>\n About 4 in 10 workers with health FSAs forfeited unused money in 2024, according to an October report<\/a> from the Employee Benefit Research Institute, a nonprofit research organization. Among those FSA account holders, the average forfeiture was $404, down from $436 in 2023. The research examined more than 3.3 million accounts representing $3.9 billion in contributions.<\/p>\n Yet even workers who don’t zero out their balance may still benefit from using an FSA, compared with what they would have spent using after-tax dollars to cover the same expenses<\/a>.<\/p>\n “Even if someone forfeits FSA funds back to their employer<\/a>, they can still come out ahead \u2014 relative to not participating in an FSA \u2014 if the amount they forfeited is less than the tax savings<\/a> they realized,” said Jake Spiegel, a senior research associate for EBRI and author of the study.<\/p>\n<\/div>\n Nearly three-quarters \u2014 72% \u2014 of state and local government workers and 47% of private-sector workers have access to a health FSA in 2026, according to the Bureau of Labor Statistics<\/a>. That compares with 68% and 40%, respectively, in 2017.<\/p>\n FSAs differ from health savings accounts<\/a>, or HSAs, which some people use in conjunction with high-deductible health plans. Although both let you set aside pretax money for health care expenses, HSAs<\/a> let you roll over your balance from year to year, and even invest it.\u00a0<\/p>\n<\/div>\nOne-third of FSA holders face use it or lose it<\/h2>\n