Learning more about how carryover works can help you plan and make the most of your benefits.
Carryover 101
Carryover lets you carry over some of your unused benefit funds after your plan year ends, so they roll over into the next plan year instead of being forfeited.
Who sets it: Your employer decides whether your plan offers carryover and, if so, how much can roll over.
Which benefits include it: Carryover can apply to benefits such as flexible spending accounts (FSAs), limited-purpose FSAs (LP-FSAs), health reimbursement arrangements (HRAs), and lifestyle spending accounts (LSAs). Dependent care FSAs (DC-FSAs) don’t allow carryover under IRS rules.
Also known as
Carryover is sometimes called rollover by others in the benefit industry. We use “carryover.”
How carryover works
When your plan year ends, any eligible unused funds — up to your plan’s carryover limit — roll into the next plan year. You can spend them on the same eligible expenses your benefit normally covers.
Example:
You have $800 remaining funds for your general health FSA plan that ends on December 31st, but you have a $640 carryover limit and are enrolled in an FSA benefit for the following plan year.
December 31: The plan year ends. If your plan has a run-out period, it begins now.
During the run-out period: Your previous plan year stays open, so you can keep submitting claims for eligible expenses from that year.
After the run-out period ends: Up to $640 carries into your new plan year. Anything left above the limit is forfeited.
How much carries over
Carryover amounts depend on your benefit type and your employer’s plan.
General health FSAs and LP-FSAs: The IRS sets a maximum carryover amount each year, and your employer may set a lower limit.
HRAs and LSAs: Your employer sets the carryover amount, which can range from a specific dollar cap to your full unused balance.
Anything above your plan’s carryover limit is forfeited at the end of the run-out period.
Carryover vs. extension period vs. run-out period
All three give you more flexibility at plan year-end, but they work differently.
Incur definition
You incur an expense on the day you get care or buy an item. A doctor's visit, for example, is incurred on the date you see the doctor, even if the bill arrives weeks later.
| Carryover | Extension (Grace) period | Run-out period |
What it gives you | Unused funds roll into the next plan year, up to your plan’s limit | More time to incur eligible expenses | More time to submit claims for expenses from the previous plan year |
Which eligible expenses qualify | New expenses incurred in the next plan year | New expenses incurred during the window | Only expenses incurred during the previous plan year |
Typical length | Funds roll forward year over year | Set by your employer (up to 2.5 months) | Set by your employer (often 60–90 days) |
Regulation note
For health FSAs, a plan offers either a carryover or an extension period — not both. The IRS doesn't allow a health FSA to combine them.
Find your plan’s details
Plan-specific details — including carryover amount, extension period length, and run-out period length — are set by your employer.
Platform tool
To find out if your benefit has a carryover, an extension period, or a run-out period, check the Plan Details section of your Benefit card. For step-by-step instructions, see Confirm available funds for your benefit.