Open enrollment season lands in October and November for most employer benefit plans. While most of the attention goes to health insurance choices, three other accounts sit in the same portal — accounts where the decisions you make in the next few weeks either protect money you’ve already set aside or determine how much you’ll save on taxes in 2027. One of those accounts just got a significant rule change, and not every employer has passed it along.
This is the Q4 checklist for all three: the Health FSA, the Dependent Care FSA, and your commuter and parking benefits. Each follows different rules on deadlines, rollovers, and what qualifies. The actions for each one are different, and the window to act is short.
The one rule that applies to both FSAs: FSA funds can only reimburse expenses incurred during the plan year. Submitting a claim in January 2027 for a December 2026 expense is fine. Submitting a claim in January 2027 for a January 2027 expense against your 2026 FSA balance is not — unless your plan has a grace period (explained below).[1][2] Commuter benefits work differently; more on that further down.
Three Accounts, Three Different Deadline Rules
The confusion around FSA deadlines comes from a simple fact: the three accounts work differently. Before looking at each one, here is the summary. The dates assume a calendar-year plan that ends December 31.
*$7,500 is the federal ceiling ($3,750 if married filing separately). Your employer can set a lower cap. See the Dependent Care section below.
Health FSA: Check Your Balance and Spend What’s Left
The 2026 Health FSA contribution limit is $3,400, up from $3,300 in 2025. Your employer can set a lower limit.[3] If you elected the maximum and your family has not had significant medical expenses this year, you may be carrying a balance that will not automatically roll forward — you need to use it or direct it to a qualifying expense before your plan’s deadline.
Grace Period vs. Carryover vs. Neither
Plans are not required to offer a rollover mechanism, but many do offer one of two options. Understanding which one your plan has determines your actual deadline.
Carryover: Your employer may allow up to $680 of your unused 2026 Health FSA balance to carry into 2027.[3] The IRS sets that ceiling; your employer may allow less, or none at all. A plan with a carryover option cannot also offer a grace period — it is one or the other.[1]
Grace period: Some plans give you up to two and a half extra months to incur expenses — through March 15, 2027 for a calendar-year plan.[2] Any qualifying expense incurred between January 1 and March 15, 2027 can be reimbursed from your 2026 FSA balance under a grace period. The key rule is when the expense is incurred, not when you are billed or when you pay. Under IRS rules, an expense is incurred on the date the medical service is actually provided — not the date the bill arrives or when payment is due. A doctor visit in December 2026 is a 2026 expense even if the explanation of benefits does not arrive until February 2027; submit that claim during your plan’s run-out window. For the grace period specifically, the service must actually take place between January 1 and March 15, 2027 for the expense to count against your 2026 FSA balance.
Run-out period (separate from both): Even without a grace period or carryover, most plans give you a run-out period after the plan year ends to submit claims for expenses you already incurred.[1] Your plan sets how long it is — find the date and write it down. A run-out period extends your paperwork deadline, not your spending deadline. If you paid a copay in December, you can submit that claim in February. You cannot use a run-out period to cover an expense you have not had yet.
How to find out what your plan offers: Log in to your FSA administrator’s website or app and look for your plan’s Summary Plan Description (SPD). It will state whether you have a grace period, a carryover (and the maximum), or neither, and how long your run-out period is. Your HR department can also tell you. Do not assume one or the other — they are plan-level elections that vary by employer.
What to Spend Your Health FSA Balance On
If you are carrying a balance and your plan has no extension, or if you want to spend it down regardless, the following are common Health FSA-eligible expenses that can be scheduled or purchased now. Anything already reimbursed by insurance or another account does not count.[1]
- Dental visits: cleanings, X-rays, fillings, crowns, orthodontia (ask your administrator how it handles payment plans)
- Vision care: eye exams, prescription glasses, contact lenses and solution
- Prescription copays and out-of-pocket drug costs
- Over-the-counter medications, including pain relievers, allergy medicine, and cold remedies (the CARES Act made these FSA-eligible without a prescription)
- First aid supplies, blood pressure monitors, and other medical equipment
- Qualifying mental health services and therapy copays
- Hearing aids and batteries
Gym memberships, cosmetic procedures, toiletries, and general wellness products are not eligible. Your FSA administrator’s website typically has a full eligible expense list and a searchable tool to confirm specific items.
Setting Your 2027 Health FSA Contribution
During open enrollment, your employer will ask you to elect a 2027 Health FSA contribution. As of October 30, the IRS has not published the 2027 limit. The 2026 figure came out in Revenue Procedure 2025-32 last October,[3] and the 2027 figure should follow the same path. Check your benefits portal or IRS.gov for the current figure before finalizing your election.
The more important question is how to set the amount. Review your 2026 FSA claims to see what you actually spent. Add any anticipated 2027 expenses — a planned procedure, braces, a new set of glasses. Then elect that amount, or slightly less. It is better to use every dollar you elect than to forfeit $200 at year-end. If your plan has a carryover, you have more room to over-elect slightly; if it does not, precision matters more.
Median U.S. household income was $87,460 in 2025,[6] which means a family filing jointly falls in the 12% federal tax bracket.[3] The Health FSA reduces your taxable income by the full elected amount. At a 12% federal bracket, plus an average 3% state income tax rate,[7] a $3,400 election saves the average American family $510 in taxes. That is real money — worth getting the election right because forfeiting $200 at the end of the year nearly wipes out all your savings.
If you have an HSA — or are considering one for 2027 — note that a general Health FSA is not compatible with a high-deductible health plan and HSA combination, and that includes coverage through your spouse’s general FSA. Some employers offer a limited-purpose FSA (dental and vision only) that can be held alongside an HSA; not all plans include this option.[1] See our 2027 HSA guide for the full comparison.
Dependent Care FSA: The Limit Just Changed (Check What Your Employer Did)
This is the biggest change in the 2026 FSA landscape, and it is an easy one to miss.
The One Big Beautiful Bill Act raised the federal Dependent Care FSA limit from $5,000 to $7,500 starting in 2026.[4] For married filing separately, the limit rose from $2,500 to $3,750. That is a 50 percent increase in the amount families can set aside, pre-tax, for qualifying child and dependent care.
The Catch: Your Employer Decides Whether to Offer It
The higher limit is a ceiling, not a requirement. An employer that wants to offer $7,500 has to update its plan document — and an employer can also choose to keep its cap at $5,000.[8] If your plan still caps elections at $5,000, that may be a deliberate choice or a plan nobody has updated yet. Either way, your limit is $5,000 until the plan changes.
This matters in two directions. If your employer offered $7,500 this year and you elected it, you are in good shape — you have more room to cover qualifying expenses pre-tax. If your employer still capped elections at $5,000, ask HR during open enrollment whether they plan to raise it for 2027.
Check now: Log in to your benefits portal and find your Dependent Care FSA election. Note the maximum your plan allowed this year, your remaining balance, and your deadlines to incur and claim expenses. Then confirm with HR what the 2027 limit will be so you can plan your enrollment election.
What the Dependent Care FSA Covers
Qualifying expenses are those that allow you (and your spouse, if married) to work or look for work. The amount you can exclude also cannot exceed the lower-earning spouse’s earned income, with special rules for a spouse who is a full-time student or unable to care for themselves.[9] For 2026, covered expenses include:
- Day care and preschool for children under age 13
- Before-school and after-school care programs (for children under age 13)
- Summer day camps, but not overnight camps (for children under age 13)
- In-home care providers and nannies, if reported as wages (for children under age 13)
- Care for a spouse or dependent who is physically or mentally incapable of self-care
The annual limit is per household, not per employee. If both spouses work and each has access to a Dependent Care FSA through their employer, contributions can be split across both accounts — but the combined total cannot exceed $7,500 for married filing jointly (or $3,750 each for married filing separately).[4] If your employer’s plan is capped at $5,000, your spouse can contribute the remaining $2,500 through their employer’s plan to reach the full $7,500 household maximum.
Tuition for kindergarten and above is not an eligible Dependent Care FSA expense. Private school costs for school-age children are not covered. Before- and after-school care for a school-age child still counts; the tuition itself does not.
No Carryover — But Check for a Grace Period
Unlike the Health FSA, the Dependent Care FSA has no carryover option. Your employer can, however, offer a grace period — up to two and a half extra months, through March 15, 2027 on a calendar-year plan, to incur qualifying care against your 2026 balance.[2] Whatever is left after that, and after your run-out window closes, is forfeited. If your care situation changed during 2026 — a child started school, a caregiver arrangement ended, summer camp was shorter than planned — and you have a Dependent Care FSA balance, you need to incur additional qualifying expenses before December 31 (or before your grace period ends, if you have one), then submit them before the run-out window closes.
If you know you will not be able to use the full balance, this is also worth noting for 2027 enrollment: elect what you will actually spend. A Dependent Care FSA forfeiture is a real loss, not a paper one.
Check the Dependent Care Credit Too
The Child and Dependent Care Credit also changed for 2026. You cannot use the same expenses for both the credit and your FSA — money you run through the FSA reduces the expenses you can claim for the credit.[10] Depending on your income, the credit can be worth more than the FSA on some of those dollars, so run both numbers before you raise your election.
Commuter and Parking Benefits: The One You Can Adjust Any Month
Transit and parking benefits follow entirely different rules than the spending account FSAs above, and that difference works in your favor.
The 2026 limits are $340 per month for qualified transit passes and vanpool expenses, and $340 per month for qualified parking — both up from $325 per month in 2025.[3] These are employer-sponsored pre-tax benefits, not annual elections. You can change your commuter election during the year without waiting for open enrollment. The change applies going forward, and your administrator sets the cutoff for when it kicks in.[5]
Unused Balances Don’t Expire on December 31
Commuter and parking benefits apply to the employee’s own qualifying commuting costs only. You cannot use your transit or parking benefit account to pay for a spouse’s or dependent’s commuting expenses.[4]
Unused commuter and parking balances do not hit a December 31 deadline. Plans can carry unused money forward to later months.[5] This means the stakes here are lower than the spending account FSAs — you are not about to lose money because December 31 is approaching. One catch: if you leave your job, unused pre-tax money generally cannot be paid back to you as cash.[5]
That said, there are two reasons to review your commuter elections right now.
If you are over-contributing: You are setting aside pre-tax money you are not spending. That money sits in the account rather than in your paycheck. If your commuting pattern has changed — you are working from home more, your employer moved buildings, you switched from train to car — reduce your monthly election to match your actual spending. Check your administrator’s cutoff for when the change takes effect.
If you are under-contributing: If you are spending more on transit or parking than you are currently electing, you are paying for part of your commute with after-tax dollars. Calculate what you spend each month and raise your election to match. At a 12% federal bracket plus an average 3% state rate, the tax savings on $340 per month in pre-tax transit spending amount to roughly $612 per year.
Open Enrollment Is Open Now: Set the Right Amount for 2027
For most employers with calendar-year plans, open enrollment runs from October through mid-November, with coverage and FSA elections effective January 1, 2027. Check your own employer’s dates. Here is how to approach each account.
Health FSA for 2027
Review your 2026 claims history. Your FSA administrator’s website or app typically shows every reimbursement you submitted during the year. Add the total, factor in any recurring costs you expect to continue (orthodontia, regular prescriptions, glasses), and add any one-time anticipated expenses (a procedure you have been putting off, a new pair of glasses). Elect that amount, adjusted for whether your plan has a carryover or grace period.
The 2027 contribution limit had not been released as of October 30. Your HR department or benefits portal will show the updated limit once it is available. If you plan to open an HSA in 2027, sort out FSA compatibility before you elect.
Dependent Care FSA for 2027
Ask your HR department two questions before making your election: (1) Is the plan limit $7,500 for 2027, or is it still $5,000? (2) If it is still $5,000, does the employer plan to raise it? The $7,500 limit is a significant benefit — if your employer has not adopted it, it is worth asking.
For the election amount itself: add your actual 2026 qualifying care costs and project any changes for 2027. A new childcare arrangement, a change in work schedule, or a child turning 13 will all affect your number. Elect conservatively rather than aggressively, since there is no carryover to protect you if your care situation changes. And compare it against the dependent care credit before you go to the max.
Commuter Benefits for 2027
If you are already using commuter benefits and your commuting pattern is stable, there is usually nothing to do during open enrollment — your monthly elections typically continue automatically. Adjust if your situation changes.
Common Questions
What happens to my Health FSA balance if I don’t use it by December 31?
It depends on your employer’s plan. Some plans include a grace period that lets you incur qualifying expenses through March 15, 2027. Other plans allow a carryover of up to $680 into 2027. A plan can offer one or the other, not both. If your plan offers neither, any balance you have not used on expenses incurred by December 31 is forfeited. Check your Summary Plan Description or your benefits portal to see what your employer allows.
Did the Dependent Care FSA limit change for 2026?
Yes. The One Big Beautiful Bill Act, signed July 4, 2025, raised the federal limit from $5,000 to $7,500 starting in 2026 ($3,750 if married filing separately). But the higher limit is optional for employers, so your plan may still cap elections at $5,000. Ask HR which limit applied to your plan this year and what they plan for 2027.
Can I change my commuter or parking benefit election midyear?
Yes. Unlike Health FSA and Dependent Care FSA elections, which are locked in at open enrollment, transit and parking elections can be changed during the year. Changes apply going forward, and your administrator sets the cutoff for when they take effect. If you are over-contributing and building up an unused balance, reduce your election now. If your commuting has increased, raise it.
What is the difference between a grace period and a run-out period?
A grace period extends the time you have to incur eligible expenses. If your plan has one, you can use your 2026 FSA balance for qualifying expenses incurred through March 15, 2027. A run-out period is the window after the plan year closes when you can submit reimbursement claims for expenses you already incurred. Your plan may have a grace period, a run-out period, both, or neither. Read your Summary Plan Description to confirm.
What are some eligible Health FSA expenses I can use before year-end?
Common eligible expenses include dental checkups and procedures, eye exams and prescription eyeglasses or contact lenses, prescription copays, over-the-counter medications, first aid supplies, hearing aids, and qualifying mental health services. Gym memberships, cosmetic procedures, and toiletries are not eligible. Your FSA administrator’s website typically includes a full eligible expense list and a searchable tool.
The Bottom Line
Three accounts, three sets of rules. The immediate actions for October and November:
- Health FSA: Log in to your FSA portal and check your balance today. If you are carrying a meaningful amount that will not roll over, schedule dental, vision, or other eligible appointments before your plan’s deadline — December 31, unless you have a grace period.
- Dependent Care FSA: Confirm with HR what your plan’s limit was for 2026 and what it will be for 2027. If you have a remaining balance, use it on qualifying care before your deadline and submit claims before your run-out window closes.
- Commuter benefits: Log in to your transit or parking benefit portal and compare your monthly election to your actual spending. Adjust accordingly — and check when the change takes effect.
Open enrollment closes. The FSA window you miss is the one you cannot reopen until next year.
Where to go next on ELI: If you are comparing a Health FSA with an HSA for 2027, our 2027 HSA Limits and HDHP guide covers how they interact and who benefits from each. The White-Collar Benefits overview covers the full landscape of employer benefits worth understanding. The ELI Tools page has worksheets to help you estimate what you will spend on healthcare and childcare next year.
