Learning more about how extension periods work can help you plan and make the most of your benefits. Not all plans include an extension period — availability and details depend on your plan design, so always refer to your plan documents for complete information.
Extension periods 101
Also known as
An extension period is sometimes called a grace period. We use “extension period.”
An extension period is extra time to incur eligible expenses in your benefit account after your plan year ends. Without it, the last day to incur expenses is the last day of your plan year.
Who sets it: Your employer (plan sponsor) decides whether your plan includes an extension period and how long it lasts.
Which benefits include it: Extension periods apply to benefits like flexible spending accounts (FSAs), limited purpose FSAs (LP-FSAs), and dependent care FSAs (DC-FSAs), depending on your specific plan and applicable rules.
Incur definition
You incur an eligible expense on the day you receive care or purchase an eligible item. A doctor's visit, for example, is incurred on the date you see the doctor, even if the bill arrives weeks later.
How extension periods work
If your plan has an extension period, it starts the day after your plan year ends. During that window, you may keep incurring eligible expenses against leftover funds from the previous plan year, subject to your plan’s terms.
Example
Your plan year ends December 31, and your employer offers a two-and-a-half-month extension period.
January 1: The new plan year starts. The extension period begins.
January 1–March 15: You can still incur eligible expenses against last year’s plan.
March 16: The extension period ends. You can no longer incur new expenses against last year’s plan.
Extension period length varies by plan. For FSAs, LP-FSAs, and DC-FSAs, the IRS allows a maximum of two and a half months.
Remember to submit claims
Don’t forget to submit claims! If you need to be reimbursed for incurred expenses during the extension period (e.g., eligible expenses paid out of pocket), remember to submit claims for reimbursement during either the extension period or run-out period if your benefit has one.
Eligible expenses
Extension period funds work like the rest of your benefit. You can use them for the same eligible expenses your plan normally covers — including new expenses incurred during the extension period itself, not just leftover expenses from the previous plan year.
Extension period vs. run-out period
Both give you more time, but they work differently:
| Extension period | Run-out period |
What it gives you | More time to incur eligible expenses | More time to submit claims for eligible expenses incurred during the previous plan year |
Which eligible expenses qualify | New expenses incurred during the window | Only expenses incurred during the previous plan year |
Find your plan’s details
Plan-specific details — including extension period length, carryover amount, and run-out period — are set by your employer (plan sponsor) in accordance with plan terms.
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.