I Write About Money, but I Almost Lost a $3,000 Reimbursement

The last several months have been difficult, which has led to a relaxation of the typical micromanagement of my financial affairs.

Health challenges and grieving over several deaths within my circle of family and friends sent me into a bit of a depressive state. After finishing work, I was so mentally drained that I went to bed early, too exhausted to handle certain financial tasks.

Last month, I was in a state of frenzy. The deadline to submit claims for my workplace flexible spending account (FSA) was approaching. I had elected to contribute the maximum allowed for 2024, $3,200. My account indicated that about $200 had been charged to my FSA debit card, meaning the money was paid directly to the vendor.

However, I needed to file claims to get back the rest of the money or risk losing it to my employer. (Employers get to keep the money, but more on that later.)

I had about a week to find and upload dozens of receipts covering about 100 individual expenses that included co-pays for doctor visits, prescription medication, over-the-counter items, medical equipment, dental charges and eyeglasses for me and my family.

It’s my fault.

I had been receiving regular emailed notices about the deadline. But each time I sat down at my computer to search for documents online or rummage through my home or purse for receipts, I became overwhelmed.

I’m sharing this story as both a cautionary tale and an empathetic acknowledgment that life can often interfere with managing your money, even if you’re a personal finance columnist.

Honestly, this experience has humbled me.

I admit that there are times when I have been overly critical of people who procrastinate with their finances. They accumulate late fees for bills or credit cards that they could have paid on time. Or they don’t file their tax returns by the due date and end up with interest and penalties, even though they had the money to pay the IRS.

“How could you let this happen?” I would think to myself. (When people are in a crisis, keep your judgmental comments to yourself.)

But our financial lives have become so complicated that it can be intimidating. We have to make so many decisions and meet countless deadlines. How many times have you forgotten to cancel a trial subscription ? Or, after months or years, realized you’re paying for a service you rarely use?

Then there is the “life happens” category: You, your spouse, partner, child or pet may become ill ; you might have to tackle issues related to work or family drama. An overload of activities and events takes priority over dealing with your finances.

You promise to take care of a financial task, pushing it off until tomorrow.

But tomorrow comes and it’s too late.

Or, for me, you’re a week away from a deadline to submit claims to be reimbursed for $3,000 in FSA money.

Cue a panic attack.

Now, before I get to the details of my ordeal, here’s some background on how an FSA works.

Similar to other tax-favored accounts — a dependent-care flexible spending account or a health savings account (HSA) — an FSA allows employees to set aside money tax-free for qualifying expenses .

When you set up one of these accounts, money is deducted from your paycheck on a pretax basis and can be used to cover out-of-pocket health and dependent-care expenses.

Last year, the maximum you could contribute to an FSA was $3,200. For 2025, individuals can contribute up to $3,300.

If you can afford to fund an FSA, it’s a good tax break.

However, managing paperwork can be overwhelming. You may be required to submit documentation to prove that your purchase was an eligible expense.

Most importantly, there is a “use-it-or-lose-it” policy, which means money leftover at the end of each plan year is forfeited and kept by the employer. But there are also strict rules on what employers can do with the leftover funds, such as using them to offset the administrative costs of the FSA plan.

A plan can allow a carryover amount or a grace period to spend the money, which is up to the employer. The maximum carryover for 2025 is $660.

It turns out many employees forfeit FSA funds each year because of the “use-it-or-lose-it” rule, according to the Employee Benefit Research Institute (EBRI). In 2023, 45 percent of FSA account holders forfeited at least part of their contributions, according to a recent EBRI report . The average forfeiture was $436.

“The deadline can definitely catch people off guard,” said Jake Spiegel, an EBRI senior research associate for health and wealth. “But there is no judgment in that we all have busy lives.”

Plus, don’t feel too bad about the money lost, said Spiegel, pointing out that you still get the tax break.

I wasn’t considering the tax savings, so for several nights, I stayed up feverishly filing claims and double-checking which purchases were FSA eligible. For instance, my son turned 26 last year, pushing him off the family health plan following his birthday. I had assumed this also meant I couldn’t submit FSA claims for him. But I found out that once children turn 26, they have until the end of that calendar year to incur expenses. I successfully claimed the $175 I had paid for his eyeglasses.

About a dozen claims were denied and then accepted after I uploaded more information or the correct documents.

The claim for my son’s eyeglasses was denied because I needed to provide his eyeglass prescription. Several receipts from one medical provider didn’t itemize the charges, so I had to call and request a breakdown. My husband’s dental expenses were initially rejected because I mistakenly downloaded the paid receipt instead of the invoice that detailed the procedures he had undergone.

At one point, I had submitted enough claims that there was only about $550 left unaccounted for.

As I dragged myself to bed one night, my husband said, “Let it go, honey.”

I couldn’t. Instead, I continued to file claims while promising myself never to be in this position again. I suggest, as I will do going forward, that you submit claims throughout the year.

A few days after the deadline, I checked the FSA account. Despite my efforts, I had resolved that I wouldn’t be getting all my money back.

Then I saw this: “$0.00 available funds.”

I had found enough claims to get reimbursed for all my money.

It was a hallelujah, “get the heck out of here” moment.