The FSA Grace Period:

The FSA Grace Period is an extended period of coverage at the end of every plan year that allows you extra time to incur expenses to use your remaining Flexible Spending Account balance after the close of the plan year.  The Grace Period is 2 ½ months long (through March 15th of the following year)

What this means for you is that you have until March 15 of the next plan year to incur claims against your previous year's FSA funds.  The State of Oregon adopted this amendment to reduce the chance that a participant in the FSA program will forfeit any funds.  An easy way to think about this program modification is that every 12 month plan year is actually 14 1/2 months long. 

Only those who have FSA coverage through December 31 of the previous plan year can continue to incur claims in the grace period.

All FSA claims for services provided during the grace period will automatically be processed against the previous year's plan year first if filed by the claims filing deadline for that plan year, unless you request otherwise.  If your claim exceeds the available funds from the previous plan year, any excess will be automatically applied to the new plan year. 

Please note that if you use your FSA debit card to pay for expenses during the FSA grace period (January 1st - March 15th), the purchase will be applied towards your new plan year balance.  FSA debit card purchases during the grace period cannot be used to access funds from the previous plan year. 

Example 1:  Kristen has $50 remaining in her medical FSA at the end of the plan year and has no more expenses to submit with dates of service during the actual plan year.  Two weeks after the end of the plan year, Kristen goes to her dentist and incurs a charge of $145.  She submits a claim to ASI.  ASI’s reimbursement software processes the claim and $50 is applied to the remaining balance from the previous plan year, and $95 is applied to the new plan year’s balance. 

Example 2:  Kristen submits the claim for her $145 in dental expenses, but, knowing that she has a charge from the hospital for services provided during the past year, but has not received the billing statement yet, Kristen wants the entire $145 to be applied to the current year. Kristen includes a note with the claim packet asking to apply the entire dollar amount to the new plan year.  ASI’s claim processor applies the entire reimbursement request to the new new plan year. 

The State of Oregon's claims filing deadline is March 31.  All claims for your FSA money for the previous plan year must be postmarked or faxed by this date, or they will not be accepted!