What actually happens on December 31
A health flexible spending arrangement is funded by salary reduction, and the money must be used for expenses incurred during the plan year or it is forfeited. For 2026 the IRS caps the salary reduction at $3,400 (Rev. Proc. 2025-32). Employers can soften the rule in one of two ways, but not both (IRS Notice 2013-71):
| Plan design | What happens to unspent 2026 money | Real deadline for the patient |
|---|---|---|
| No relief | Forfeited | Expenses must be incurred by December 31, 2026 |
| Carryover | Up to $680 rolls into the 2027 plan year (plan may set a lower cap) | December 31 for anything above the carryover amount |
| Grace period | Can be spent on expenses incurred in the first 2.5 months of the next year | March 15, 2027 for a calendar-year plan |
Separately, most plans give a run-out period after year end to submit claims for expenses already incurred. That is a paperwork deadline, not a spending one.
As of late October, the IRS had not published the 2027 health FSA limit; projections around $3,500 are estimates, not limits. HSAs are a different account: no use-it-or-lose-it, and the IRS has already set 2027 HSA limits at $4,500 self-only and $9,000 family (Rev. Proc. 2026-24).
So "the December deadline" is true for some of your patients and false for others. Your messaging has to allow for that.
This post explains the rules as we understand them for operators. It is not tax advice, and patients should confirm with their plan administrator.
What qualifies, and with what proof
Prescription medication. Qualifies as a medical expense. The patient needs an itemized receipt and the prescription on record.
Telehealth visits and provider review. Medical care, so eligible, with an itemized receipt naming the provider service and date.
Weight-loss program fees and weight-loss medication. IRS Publication 502 allows weight-loss costs only when the weight loss treats a specific disease diagnosed by a physician, such as obesity, hypertension or heart disease, and excludes it when the purpose is appearance or general well-being (Publication 502). In practice, administrators often ask for a Letter of Medical Necessity for program fees, and sometimes for the medication too.
Supplements, general wellness add-ons, cosmetic services. Generally not eligible. Keep them on a separate line or a separate charge.
The implementation details (merchant coding, card declines, receipt fields, LMN workflow) are in our HSA and FSA implementation guide. This post is about December.
The timing rule that catches brands out
An FSA expense is incurred when the care is provided, not when it is billed or paid. That is the rule in the proposed cafeteria plan regulations (Prop. Treas. Reg. 1.125-6) and the one administrators apply.
Consequences for a telehealth brand:
- A December membership month for December care is a 2026 expense.
- A prepaid quarter bought on December 20 covering January through March is mostly a 2027 expense. Charging it to a 2026 FSA card does not make it a 2026 expense, and the administrator can deny the claim or ask for repayment.
- A prescription dispensed in December is generally a December expense. A larger supply than the clinician prescribed is not something to sell for FSA reasons, and your clinicians should never adjust a prescription because of the patient's account balance.
- A patient with a grace-period plan can use 2026 money for care through March 15, 2027, so they do not need to rush.
We would not sell "prepay 2027 with your 2026 FSA" offers at all. They read well in an email and they generate denied claims in February, which turn into refund requests and support tickets pointing at you.
Messaging without pressure tactics
Year-end FSA emails from retailers are full of countdowns. A prescription brand should be more careful: the FTC is watching subscription and health marketing closely (its July 2026 complaint against Hims & Hers centered on charging and cancellation practices, which Hims denies), and a patient who starts a medication because a timer told them to is a poor clinical start.
| Say | Do not say |
|---|---|
| "If you have FSA money left for 2026, you may be able to use it for eligible care with us." | "Use it or lose it: spend your FSA with us before midnight!" |
| "Check your plan: some plans have a carryover or a grace period into 2027." | "Your FSA money disappears on December 31." (Not true for every plan.) |
| "We provide itemized receipts and, where your provider documents a diagnosis, a Letter of Medical Necessity." | "FSA approved" or "guaranteed reimbursable" |
| "Eligibility is decided by your plan administrator." | "Weight loss is FSA eligible." (Only when treating a diagnosed condition.) |
| "Starting treatment is a clinical decision; your provider will review your intake." | "Get approved today so you can spend your balance." |
No countdown timers, no fake scarcity, no "last chance" on a prescription. And nothing that implies a provider will approve someone because of the calendar.
Audience matters too. Send year-end FSA messaging to existing patients and to leads who asked about HSA or FSA payment. Do not build an ad campaign on "FSA deadline" targeting for a prescription product; that is the kind of creative that draws platform rejections and regulator attention.
Operations for the last six weeks of the year
- Itemized receipts for every charge, downloadable from the portal, with provider service, medication and date of service on separate lines. A blended "membership" line is the most common reason a claim is denied. Billing UX covers the patient side.
- LMNs generated at the point of care for patients with a documented diagnosis, dated, and stored where the patient can download them. Ask your medical director which patients qualify. Never write one for a patient without the diagnosis.
- Support macros for "my FSA card was declined." The answer is usually merchant coding or a mixed cart; the fallback is "pay with another card and submit the itemized receipt for reimbursement."
- A plain-language FSA page linked from checkout: what usually qualifies, what documents you provide, and a note that the administrator decides.
- January readiness. Patients who chose new 2027 elections during open enrollment will want to use them from January 1, and the HSA telehealth safe harbor is now permanent. The employer angle is in the employer and HSA channel post.
December is also the month carriers close and refills move; the holiday refill runbook has the dates. If your program fee is changing in 2027, the GLP-1 pricing post is the place to start.
Where Turbopills fits
Turbopills issues itemized receipts for every charge and renewal, stores them in the branded portal for patients to download, keeps medical and non-medical items on separate lines, and bills only after provider approval, so a December FSA charge is for care that was actually reviewed and provided. LMN content and eligibility decisions stay with your clinicians and the patient's administrator. We are in private beta and quote per program; if FSA and HSA spend matters to your patients, ask to see a sample receipt in a demo and check it against your administrator's requirements.
FAQ
When does FSA money expire in 2026? For most calendar-year plans, December 31, 2026. Plans with a carryover let up to $680 roll into 2027, and plans with a grace period allow spending on care through March 15, 2027. A plan can have one or the other, not both.
Can I use my FSA for telehealth? Generally yes: telehealth visits and prescription medication are medical expenses. You need an itemized receipt, and the plan administrator makes the final call.
Is GLP-1 weight-loss treatment FSA eligible? Weight-loss treatment qualifies only when it treats a specific disease diagnosed by a physician, such as obesity, per IRS Publication 502. Administrators often ask for a Letter of Medical Necessity.
Can I prepay next year's telehealth membership with my FSA in December? Usually not. An FSA expense is incurred when care is provided, not when it is paid, so January to March care paid in December is generally a 2027 expense. Check your plan; this is not tax advice.