The maximum health flexible spending account (FSA) carryover is $680 for plan years beginning in 2026, according to the Internal Revenue Service (IRS) in Revenue Procedure 2025-32, but each plan’s rules and deadlines sit in plan documents and portals that many frontline employees rarely open. Under FSA use it or lose it rules, employees forfeit unspent money above the plan’s limit, and human resources (HR) teams field the same deadline questions from every site in the final weeks of the plan year.
This Short Message Service (SMS) plan sets out which employee groups need which reminder, when, and in what words, so each employee can see their own deadline, spend their balance in time, and get answers to questions about it. With SMS-based platforms like Yourco, employees can reply to any message in their own words from the same phone that received it. Fewer repeat questions give HR and site managers more time for claims, eligibility, and termination cases that require their judgment.
TL;DR
- Health savings account (HSA) balances roll over, while a health FSA allows a carryover, a grace period, or neither, depending on the plan.
- Each plan group gets a reminder carrying only its own dates.
- Reminder schedules count back from the plan year-end date, starting in October, with the main reminder about 30 days out.
- Many HR teams keep balances and health details out of texts and point employees to the plan administrator’s portal.
- SMS-based platforms like Yourco reach frontline employees on any phone, send scheduled reminders, and keep a timestamped record of each notice sent.
Clarify How FSA Use It or Lose It Differs From HSA Rollover
Employees generally forfeit unused health FSA money at plan year-end, while an HSA balance carries over to the next year, according to IRS Publication 969. A plan may soften the FSA rule with a carryover, capped at the 2026 limit or lower, or a grace period of up to two and a half months after the plan year ends.
A plan may offer either option or neither, but not both. The table compares the two accounts, but the plan document governs which option a given plan offers.
| Dimension | HSA | Health FSA |
|---|---|---|
| Who owns the account | The employee | The employer’s plan |
| Balance at plan year-end | Carries over | Forfeited unless the plan allows a carryover or grace period |
| Carryover | Not applicable | Up to $680 for 2026 if the plan permits; a plan may set a lower limit or none |
| Grace period | Not applicable | Up to 2.5 months; March 15 for a December 31 plan year |
Table sources: IRS Publication 969 and Revenue Procedure 2025-32.
Before the first reminder goes out, many HR teams confirm three details with the plan administrator:
- Carryover or grace period: which option, if either, the plan offers.
- Incur-by date: the last day an expense can count toward this plan year.
- Run-out period: the deadline to file claims after the plan year ends.
They then put those dates, plus any debit card cutoff, in every reminder. A missed date can mean forfeited money.
This information is for general awareness only. For specific compliance guidance, consult with qualified legal professionals.
Match Each Employee Group to the Right Reminder
Each plan group needs its own reminder because one all-hands email can’t include six different sets of dates. 56% of HR leaders say they have missed vital deadlines because they could not reach a frontline employee in time, according to a Yourco-commissioned survey of 150 HR leaders. Many frontline employees have no company email access.
Many benefits rosters break down into six groups, each with its own dates:
- FSA with carryover: employees spend current-year funds by the plan year-end date, file claims during the run-out, and forfeit anything above the plan’s carryover limit.
- FSA with grace period: new eligible expenses count through the grace date, so the message keeps that date separate from the December 31 plan year-end.
- FSA with neither: employees lose any unspent balance after the incur-by date, so this group needs the most urgent wording and the most reminders.
- HSA-only: the main year-end message covers the payroll cutoff for contributions.
- Dependent care FSA: separate dates belong in a separate message.
- Seasonal layoffs and project-end terminations: construction crews and seasonal logistics hires may need individual outreach, since coverage and run-out rights can change at termination.
HR builds each list from the plan administrator’s participant file and its own employee records, and SMS-based platforms like Yourco message by location, role, shift, or employee group, so each group gets only its own dates.
Build an October-to-December Cadence Around the Plan Year-End Date
A workable cadence starts in October, counts back from the plan year-end date, and repeats each date across several texts, so an employee who misses one text still sees the next. That repetition matters because 79% of HR leaders say ineffective communication can reduce benefits participation, according to the same Yourco survey of 150 HR leaders.
Send the main reminder about 30 days out, while participants still have time to use their balance before it adds to the cost of underutilized benefits. Every date below assumes a December 31 plan year-end. For a non-calendar plan year, the same reminders run on a countdown of 30, 14, 7, and 3 days before that plan year’s end.
| Timing | Audience | Message |
|---|---|---|
| Late October | All FSA participants | Which rule applies; where to check a balance |
| Early November | Participants, by plan group | First incur-by date and claims deadline |
| Mid-November | Participants, by shift and language | How to spend funds on eligible items; what claim documentation to keep |
| First week of December | Participants, by plan group | Main deadline reminder; claims deadline and debit card cutoff |
| December 24–31 | Participants, by plan group | Final incur-by reminder; what the run-out allows |
| Last payroll of the year | HSA participants | Contribution cutoff |
| January through March | Grace-period and run-out plans | Remaining claims deadline |
Open enrollment often runs in November too, so many HR teams keep one topic per text and stagger the two sequences, reusing the location, shift, and language segments built for open enrollment campaigns. Scheduled messaging lets HR queue each reminder for a time that suits a group’s shift.
Write SMS Templates That Fit Each Plan Situation
Each template puts the plan rule or date first, keeps balances and health details out of the text, and gives employees a way to reply with questions. Brackets mark the details that come from the plan document.
| Plan situation | Template |
|---|---|
| First alert, all FSA participants | [Company] HR: Your health FSA plan year ends [plan year-end date]. Check how your plan handles unused funds: [administrator portal]. Text us with any questions. |
| FSA with carryover | [Company] HR: Your health FSA plan year ends [plan year-end date]. Up to [plan limit] can carry over; amounts above that are forfeited. Check your balance: [administrator portal]. Text us with any questions. |
| FSA with grace period | [Company] HR: Your health FSA covers eligible expenses through [grace period end date]. Claims are due by [run-out date]. Details: [administrator portal]. Text us with any questions. |
| FSA with neither | [Company] HR: [plan year-end date] is the last day for health FSA expenses this plan year. Claims are due by [run-out date]. Check your balance: [administrator portal]. Text us with any questions. |
| Dependent care FSA | [Company] HR: The dependent care FSA deadline is [date], separate from the health FSA deadline. Claim form: [administrator portal]. Text us with any questions. |
| HSA-only | [Company] HR: HSA balances carry over with no year-end deadline. [payroll date] is the last payroll for [year] contributions. Text us with any questions. |
Once HR fills the brackets, SMS-based platforms like Yourco use artificial intelligence (AI) to translate each text into each employee’s preferred language across 190+ languages.
Handle the Reply Volume Without Overloading HR
Employers that text employees about FSA deadlines can expect a December burst of replies, many asking the same question. The load stays manageable when corporate sends the dated notice once, and local HR answers what follows.
Great Day Improvements (GDI), a home improvement provider with ten brands, 5,000 employees, and 338 locations, runs on that split. One enterprise-wide channel shares corporate announcements with thousands of frontline employees, while local HR teams use two-way messaging with their crews.
Most deadline questions can be answered before they ever reach HR:
- Publish a phone-readable summary page: it lists the carryover amount, grace period, and run-out date, answering the most common questions before anyone texts them.
- Give supervisors an approved answer set: consistent answers keep each location’s replies aligned, and anything outside them goes to HR.
- Route balance and claim questions to the plan administrator: individual balances and claims stay in the administrator’s portal and never in a text.
SMS-based platforms like Yourco support that routing by connecting every shift through two-way messaging on any phone, with no app or company email needed, so routine questions get answered by text. They keep a timestamped record of each notice and reply, surface recurring questions from employee conversations, and use delivery tracking that flags undelivered messages so HR can reach those employees another way.
Send Year-End FSA Reminders to Every Frontline Employee With Yourco
A year-end cadence works only when every plan group receives its dates in time and can get routine questions answered without HR handling each one by hand. Yourco’s capabilities for that cadence include:
- SMS to any phone, including basic flip phones, with no app download, WiFi, or data plan
- Two-way messaging, so employees can reply and HR can follow up in the same thread
- AI that detects the language each employee writes in and translates automatically across 190+ languages
- Scheduled messaging that queues each reminder for a chosen date and time
- The Benefits Agent, which uses natural-language understanding to answer routine benefits questions by two-way SMS from employer materials approved for it, with no app or portal, so HR spends less time repeating answers that already exist
Questions requiring personal eligibility decisions, sensitive employee records, or individualized guidance still go to HR or the benefits provider.
Yourco connects to 240+ human resources information systems (HRIS) and payroll platforms through its HRIS and payroll integrations, so new hires, role changes, and terminations flow into the messaging roster automatically.
For companies with many locations, corporate benefits teams can set one consistent standard for year-end deadline notices. That means sending the same dated notice to every site and setting shared communication standards.
Local HR handles day-to-day questions, answering their own employees’ questions about the deadline. Local managers keep direct, two-way messaging with those employees.
With Yourco’s Enterprise Bridge, corporate teams get organization-wide communication capabilities and visibility across the organization, while local teams keep direct, two-way messaging at each location.
Frontline Intelligence analyzes employee conversations with the company across every location and surfaces recurring themes, so corporate HR can spot patterns across sites. Leaders can ask it directly about recurring questions, claims concerns, and differences across locations, as in these examples:
- What are employees asking about most often after the first reminder?
- Which questions about carryover or grace period rules show up at more than one site?
- What concerns are employees raising about the claims deadline or the debit card cutoff?
- How do employee replies differ across locations and language groups?
A question that repeats across sites can point to a fix at the source, such as a clearer plan summary before the final week.
“Yourco has significantly improved how we connect with employees, making it easier to share important updates, reminders, and announcements in real time. It has become an essential tool in streamlining our internal communication.”
— Courtney Martin, Recruiting Manager, The Seagate
After 90 days on Yourco, companies can see two-way employee engagement reach 86%.
Try Yourco free today or schedule a demo to see the difference the right workplace communication solution can make.
Frequently Asked Questions About FSA Use It or Lose It
What Does FSA Use It or Lose It Mean?
FSA use it or lose it means employees generally forfeit money left in a health flexible spending account when the plan year ends. A plan may soften the rule with a carryover or a grace period, and the plan document specifies which option applies and the associated dates.
Do HSA Funds Expire at the End of the Year?
No, HSA funds do not expire at the end of the year. Amounts left in a health savings account carry over to the next year, unlike a health FSA, which generally forfeits unspent money unless the plan allows a carryover or a grace period.
When Should Employers Send FSA Deadline Reminders?
A common approach starts in October, sends the main reminder about 30 days before the plan year ends, and adds a final-week notice. Plans on a non-calendar year count back from that plan year’s end date, and the plan document sets the incur-by and claims deadlines.
What Should an FSA Deadline Reminder Text Include?
An FSA deadline reminder text usually includes the incur-by date, the claims deadline, how the plan treats unused funds, and where to check a balance, such as the plan administrator’s portal. Many HR teams keep balances and health details out of the text and invite employees to text back with questions.
How Can Employers Remind Frontline Employees About FSA Deadlines?
Employers can remind frontline employees about FSA deadlines by texting the phone number on file, providing each plan group’s dates and a way to reply with questions. SMS-based platforms like Yourco connect every shift through two-way messaging on any phone, including basic flip phones, with no app or company email needed. They translate each message, answer routine questions by text, surface recurring questions from employee conversations, and keep a timestamped record of what was sent.
