Use your FSA or HSA before year-end with AI

Who is this for?

This page is for a worker or a family in open enrollment, or just after it, holding a health flexible spending arrangement (a health FSA) or a health savings account (an HSA) and trying to see what year-end means before money is spent, left, or elected for next year. You bring the plan lines. The chat turns them into a checklist and into questions you can ask HR or payroll. You check every expense on an official page.

This is not tax advice. This is not legal advice. This is not financial advice. A chat does not know your balance, your plan year, or whether a receipt is eligible. It must not tell you to spend a guessed amount, to skip a doctor's visit, or that a purchase is "fine." You decide. You submit the claim or you leave the money where it is.

Two IRS pages stay open. Publication 969 (2025), Health Savings Accounts and Other Tax-Favored Health Plans is the publication this guide uses for a health FSA and an HSA. Publication 502 (2025), Medical and Dental Expenses explains the itemized deduction and says it covers many common medical expenses but not every possible one. Publication 969 says future developments for that publication are at IRS.gov/Pub969. Read the page that matches the year you are in. A sentence on this site is not a substitute.

A job plan's enrollment window is the date on your employer's notice. HealthCare.gov's dates and deadlines are the Marketplace calendar: November 1 is the first day you can enroll, renew, or change plans for the coming year, December 15 is the last day for coverage that can start January 1, and January 15 is when that Open Enrollment ends. If your state runs its own Marketplace, use the official site HealthCare.gov points you to. Choosing the plan itself is Compare health plans with AI. This page starts after you have an FSA or an HSA, or a summary that describes one.

The habit of pasting the figure you copied, and leaving every other number blank, is Give it the numbers. The habit of quoting the line is Ask for plain English.

What do you need before you start?

Gather the papers before you open a chat. You already have them, or you know which office must send them.

• The plan summary, the enrollment notice, or the benefits booklet lines that name the account. You want the plan year, whether a grace period or a carryover is mentioned, and any eligible-expense lines the booklet actually prints.
• A balance only if you copied it from the portal, the statement, or the app. Write it on paper. You do not have to paste it. If you do paste it, it has to be that copied figure, not a memory.
• The IRS pages above, so a sentence about a rule can be checked against the publication.
• HR or payroll's contact, printed on the notice. You will ask them which rule your plan uses. Do not ask the chat to invent an email address.
• A pen. You will black out identifiers before any line goes into a chat.

You do not need a paid AI plan. You do need the document. A chat that "knows FSAs" and has not seen your lines is guessing.

This guide is the health FSA and the HSA that Publication 969 describes. A dependent care FSA is a different account. A health reimbursement arrangement (HRA) is employer-funded, and Publication 969 says employees may not contribute to one. If the booklet says dependent care or HRA, stop and read that section of the booklet and of Publication 969. Do not reuse the health FSA checklist for a different account.

Leave the insurance card, the account number, and a photo of either one out of the chat. Keep your data private with AI.

How do you redact the account lines before you paste?

Black out identifiers on a copy before you type anything into a chat. The chat needs the rule. It does not need to know who you are.

Cover these, every time:

• Names, including a subscriber and a dependent
• Member IDs and account numbers
• A Social Security number and a date of birth
• A street address, a phone number, and an email address
• A photo of the card

Keep the plan year if it is printed, the words "health FSA" or "HSA" if they are printed, any grace-period or carryover sentence, and any eligible-expense sentence. If a claim number is how the administrator told you to refer to the account, leave it off the chat. You can write it on the question you send to HR yourself.

Do this on a personal account you control. A workplace Copilot chat can be visible to your employer. Your benefit balance is not a work file unless the employer told you to use the work tool for benefits questions. If the only chat you have is a work or school account, do not paste the statement there.

A text that demands a fee by gift card, crypto, a wire, or a payment app to "unlock" your FSA is not this guide. Stop. Spot AI scams and deepfakes.

How do you tell a health FSA from an HSA?

Paste the redacted lines. Ask the chat to quote them and to say which account the words name. A paragraph that adds a balance is not a reading.

Publication 969 says health FSAs are generally "use-it-or-lose-it" plans. Amounts in the account at the end of the plan year cannot generally be carried over to the next year. The plan can provide for either a grace period or a carryover. The grace period can be up to 2 1/2 months after the end of the plan year. If there is a grace period, qualified medical expenses incurred in that period can be paid from amounts left at the end of the previous year. Your employer is not permitted to refund any part of the balance to you. The same publication describes a separate qualified reservist distribution for certain reservists ordered to active duty, and only if the plan has been amended to allow it. If that might be you, read that section. Do not let the chat decide that you qualify.

The same publication says a plan may allow up to $660 of unused amounts remaining at the end of the plan year to be paid or reimbursed for qualified medical expenses you incur in the following plan year, for the carryover it describes, and that the plan may specify a lower dollar amount. If the plan permits a carryover, unused amounts above that carryover are forfeited. A plan adopting a carryover is not permitted to also provide a grace period for health FSAs. Publication 969 points that rule to Notice 2013-71. For tax years beginning in 2025, it states a $3,300 limit on voluntary employee salary reductions for health FSA contributions, and a $660 maximum carryover if the cafeteria plan permits a carryover. It cites Revenue Procedure 2024-40. Those are 2025 tax-year figures on the publication dated 2025. Open IRS.gov/Pub969 before you use a figure for any other year. The chat must not invent the next year's indexed amount.

An HSA is a different account. Publication 969 says you can receive tax-free distributions to pay or be reimbursed for qualified medical expenses you incur after you establish the HSA, that distributions for other reasons can be subject to income tax and may be subject to an additional 20% tax, and that you do not have to make withdrawals each year. Under "Balance in an HSA," it says amounts that remain at the end of the year are generally carried over to the next year. A rollover from one HSA to another HSA is a different section: Publication 969 says you must roll the amount over within 60 days after you receive it, and that you can make only one rollover contribution to an HSA during a 1-year period. A trustee-to-trustee transfer is not that rollover. Do not ask the chat which transfer you already did. Read the section, then ask the trustee.

Publication 969 also says an employee covered by a high deductible health plan and a health FSA or an HRA that pays or reimburses qualified medical expenses cannot generally make contributions to an HSA. Limited-purpose and post-deductible arrangements are discussed on that page. If you have both accounts, read "Other employee health plans" in Publication 969. The chat must not tell you that you are eligible to contribute.

You are helping me read benefit lines. This is not tax advice, legal advice, or financial advice. Do not tell me to spend, to contribute, or that an expense is eligible.

I redacted names, member IDs, and account numbers. Use only the lines below.

Quote each line, then say in plain English whether the words name a health FSA, an HSA, both, or NOT NAMED.
If the paste states a plan year, quote it. If it does not, write PLAN YEAR NOT IN THE PASTE.
If the paste states a grace period or a carryover, quote that sentence. If it states neither, write GRACE PERIOD OR CARRYOVER NOT IN THE PASTE.
If the paste states a dollar balance, quote it and label it COPIED FROM MY PASTE. If it does not, write BALANCE NOT IN THE PASTE. Do not estimate a balance.
Do not state a contribution limit unless I pasted the IRS sentence. If I did not, write LIMIT NOT IN THE PASTE.
Then stop.

[paste the redacted lines]

Read the quotes with your finger on the paper. If the chat says "you will lose the money" and the paste does not mention a grace period or a carryover, that sentence is unfinished. Ask HR which one the plan uses.

Three places to use the same reading. Copy the one that matches you, fill the brackets, and send only that.

Life, when the account is yours or a family member's and you have their permission to read the summary:

This is not tax, legal, or financial advice. Do not tell me what to spend.

The lines are redacted. They are the only source.
Make a checklist with two columns: Question, and Where I will look.
The where must be one of: the plan lines I pasted, IRS Publication 969, IRS Publication 502, the portal where I can see a balance, or HR.
If a row needs a balance and I did not paste one, write BALANCE NOT IN THE PASTE.
If a row needs a year-end date and the paste has no plan year, write PLAN YEAR NOT IN THE PASTE.
Do not add a dollar I did not paste.
Then stop.

[paste]

School, when you are learning how these accounts work. You write anything you turn in. Follow your teacher's rules. Use a sample your teacher gave you, or lines you have fully redacted from a plan you are allowed to use.

This is for learning. Do not write anything I will turn in. Follow my teacher's rules. This is not tax, legal, or financial advice.

I am learning the difference between a health FSA and an HSA from these redacted lines:
[paste, or "no plan yet, use only the headings I name"]

Ask me to explain, in my own words, one difference I can point to in Publication 969.
Wait for my explanation. Then tell me which sentence matches the publication's topic and which sentence I should open the page to check.
Do not write a paragraph I could turn in. Do not invent a balance or a contribution limit.
Then stop.

Work, on your own time, when the booklet is still personal. Do not put a member ID in a work chat. If the employer told you to use a work tool for open enrollment, use that tool and still leave the ID out of the prompt.

I am reading my own benefits lines. This is not a file about a coworker. This is not tax, legal, or financial advice.

Redacted lines are below. Quote any sentence about a health FSA or an HSA.
List three questions I can ask HR or payroll. Questions only.
Do not draft an email to my employer yet.
Do not mention my job title. Do not invent a deadline. If the paste has no date, write DATE NOT IN THE PASTE.
Then stop.

[paste]

How do you build the year-end checklist?

The checklist is questions, in order, with a blank where a fact is missing. It is not a spending plan.

A health FSA checklist has to separate three clocks. The plan year is on the summary. The grace period, if the plan has one, is up to 2 1/2 months after that year ends, which is Publication 969's ceiling, not a promise that your plan uses the full 2 1/2 months. The carryover, if the plan has one instead, is the amount the plan states, and Publication 969 says the plan may set it lower than the maximum. Marketplace Open Enrollment on HealthCare.gov is a third clock, for coverage you buy there, and it is not the FSA plan year. A job's benefits window is a fourth clock, printed on the employer's notice. Do not let the chat collapse them into "December 31."

An HSA checklist does not start from forfeit. Publication 969 says amounts that remain are generally carried over. The useful questions are different: whether a distribution you are considering is for a qualified medical expense you incurred after the HSA was established, whether you are about to contribute above the limit in the current Publication 969, and whether a general-purpose health FSA would affect whether you can contribute. You look those up. The chat holds the list.

This is not tax, legal, or financial advice. Do not tell me to spend a balance down.

Build a year-end checklist from the redacted lines only, plus these labels I may have left blank.

Account the lines name: [health FSA, HSA, or NOT NAMED].
Plan year, copied from the paste, or PLAN YEAR NOT IN THE PASTE: [paste or leave blank].
Grace period or carryover sentence, copied, or NOT IN THE PASTE: [paste or leave blank].
Balance I copied from my portal, or BALANCE NOT IN THE PASTE: [number or leave blank].

Rules:
- One row per question I still have to answer.
- A row that needs a date I did not paste says DATE NOT IN THE PASTE.
- Do not convert a grace period into a carryover, or the reverse.
- Do not tell me an expense is eligible.
- Do not invent a contribution limit. If I need a limit, the row says OPEN THE CURRENT IRS PUBLICATION 969.
Then stop.

If the checklist tells you to spend "about" some amount, delete that row. Give it the numbers. A blank stays blank.

A recurring charge on a bank statement is a different job, on Cancel subscriptions and lower bills with AI. An FSA election is not a streaming subscription. Do not cancel health coverage from that guide.

How do you turn an expense question into a lookup?

Publication 969 says qualified medical expenses for a health FSA are those specified in the plan that would generally qualify for the medical and dental expenses deduction. It also says expenses incurred for over-the-counter medicine, whether or not prescribed, and menstrual care products are considered medical care and a covered expense. It says you cannot receive distributions from your FSA for health insurance premiums, for long-term care, or for amounts covered under another health plan. Those sentences are the publication. Your plan can still describe its own list. Paste the list if you have it. If you do not, the answer is "open the plan," not a yes from the chat.

For an HSA, Publication 969 defines qualified medical expenses by reference to medical care in the tax code, for you, your spouse, and a dependent, and only to the extent the amounts are not compensated by insurance or otherwise. It says amounts paid for menstrual care products are treated as paid for medical care. It says you may not use HSA funds for insurance except for long-term care insurance, health care continuation coverage such as COBRA, health care coverage while receiving unemployment compensation, and Medicare and other health care coverage if you were 65 or older, other than premiums for a Medicare supplemental policy. Age limits and long-term care premium limits are on that page and in the Schedule A instructions it cites. Read them. Do not ask the chat to apply them to your premium.

Publication 502 says it explains what expenses you can and cannot include in the itemized deduction, and that it does not list every possible medical expense. Use it as the place you look. It is not a ruling on your receipt, and it is not your plan.

This is not tax advice. Do not say the expense is eligible or ineligible.

My question, in my words: [for example, whether a receipt I describe might be worth taking to the plan].
What I already found, quoted, or NONE YET:
[one sentence from the plan, from Publication 969, or from Publication 502, or leave NONE YET]

Give me:
- the heading I should open in Publication 969
- the heading I should open in Publication 502
- the question I should ask the plan if the publication and the plan could differ

If I wrote NONE YET, do not answer the expense. Say OPEN THE PAGE.
Do not name a dollar limit unless it is inside the quote I pasted.
Then stop.

You open the page. If the heading does not match the receipt, the receipt is still an open question for the plan administrator. A confident "that's covered" is the failure this page is here to stop.

How do you draft questions for HR or payroll?

One note. You are asking which rule the plan uses, or where to submit a claim. You are not asking the chat to elect next year's amount.

The shape of a calm note is the same as Write a polite complaint letter, except this note is a question, not a complaint. You still send it yourself, to the address on the enrollment notice.

Draft a short note I can edit. This is not tax, legal, or financial advice. Do not name a statute I did not paste. Do not add a dollar amount I did not paste.

Who I am writing to: HR or payroll, at the address I will add myself.
What I need: [which of grace period or carryover the plan uses / where to submit a claim / what the notice says is the last day of the plan year].
Lines I can point to:
[paste only those redacted lines]

Rules:
- Under 150 words
- Questions, not a demand to refund the balance
- If a fact is not in my paste, write NOT IN MY NOTES
- No election of a dollar contribution. I will choose that after I read the answer and Publication 969.
Then stop.

Read it aloud. Put the account reference on the note after it leaves the chat, if the office requires it. Keep a copy.

A tax folder for the year, including Form 8889 if you have an HSA, belongs on Understand your taxes with AI. That page does not file. Publication 969 says HSA distributions are reported on Form 8889. You still use the form instructions. Do not paste a Social Security number so the chat can "see the return."

What mistakes should you avoid?

These are the misses that waste the result. Skip them before you send anything.

Common mistakes

• Pasting the card so the chat "has the member ID." The member ID is the thing you black out.
• Asking for the balance. The portal has the balance. The chat has a guess.
• Treating the 2025 figures in Publication 969 as every future year. Open the current publication.
• Assuming every health FSA forfeits on December 31. Publication 969 says a plan can offer a grace period or a carryover. Yours might offer one, the other, or neither beyond the general rule. The summary says which.
• Using a health FSA checklist on a dependent care FSA or an HRA.
• Letting the chat call a purchase eligible because it sounds medical.
• Using a work account because it was already open.

When should you not use AI for this?

Close the chat if any of these is true.

• You need a tax return filed, an excess-contribution tax figured, or a distribution reported. Use the form instructions, tax software, or a preparer. The chat does not file.
• You are about to move HSA money between trustees. Read the rollover and trustee-transfer sections in Publication 969, then use the trustee's form.
• The only way to get an answer is to paste the unredacted card or a Social Security number. Read the booklet yourself instead.
• A message wants a fee by gift card, crypto, a wire, or a payment app. That is the scam guide.
• You are about to turn the chat's note in for school credit. Write the assignment yourself. Follow your teacher's rules.

What should you check before you use it?

Answer each line before you spend, elect, or send the note.

Director check: look before you use it

• Are names, member IDs, and account numbers still out of the chat? If one slipped in, delete that chat and do not paste it again.
• Can you point to a pasted line or an IRS page for every date and dollar? If the checklist states a figure you cannot find, take it out.
• Did the chat pick grace period or carryover when the paste is silent? Put NOT IN THE PASTE back, and ask HR.
• Did the chat say an expense is eligible? Delete that sentence. Open Publication 969, Publication 502, and the plan.
• Are you using a 2025 limit for a different year? Open the current Publication 969 before you keep the number.
• Are you treating this as advice? It is not tax, legal, or financial advice. You still decide, and you still act.

What is one extra tip?

The plan you are choosing, before any FSA election, stays on Compare health plans with AI. Medicare Open Enrollment is Compare Medicare plans with AI. A bill that already arrived is Understand a medical bill with AI. A denial of a claim is Appeal a denied insurance claim with AI. You file that appeal. None of those pages reads your FSA balance.

One extra tip

The moves underneath are Give it the numbers and Ask for plain English. If the line is not on the summary or the publication you opened, the chat should say it is not there.

More money guides are on Money and bills. More plan guides are on Health plans.

Which sources back this page?

These are the public pages this guide uses. Open the one that matches the question. A sentence here is not a substitute, and it is not tax, legal, or financial advice.

• Publication 969 (2025). Health FSAs, HSAs, and the sections cited above, including the 2025 salary-reduction and carryover figures, the grace-period and carryover rules, and HSA carryover of amounts that remain. Future developments are listed at the top of that page.
• About Publication 969. The IRS description of what the publication covers.
• Publication 502 (2025). The itemized deduction for medical and dental expenses. It says it does not list every expense.
• HealthCare.gov dates and deadlines. Marketplace Open Enrollment dates. Not your FSA plan year.
• Marketplace in your state. Where to go if your state runs its own Marketplace.