Q: When is the deadline to submit claims for the prior plan year under an FSA and how does that work with the grace period?
A: It depends on two key plan features: the grace period and the runout period. The grace period gives participants extra time, typically up to 2½ months after the end of the plan year, to incur new eligible expenses. The runout period, on the other hand, is the timeframe after the plan year ends during which participants can submit claims for reimbursement.
For plans that include a grace period, expenses incurred during that extended period can still be submitted during the runout period. Once the runout period ends, no additional claims can be submitted, even if the expenses were incurred during the plan year or grace period. Participants should review their plan deadlines carefully to avoid forfeiting eligible reimbursements.
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