Rollover Rules  #

Because LSAs are employer-defined, the treatment of unused funds varies. Typically, if the LSA is run on a reimbursement basis (you spend then get paid back), any unused allowance at the end of the plan year does not carry over – it just stays with the employer (since no cash actually changed hands unless reimbursed). Some employers might allow a grace period or even rollover of unspent balances for a certain time, but this is optional. It’s safest to assume “use it or lose it” within each year for an LSA unless your program specifically states otherwise. The company isn’t going to pay out unused LSA funds to you in cash (since that would defeat the purpose of being a targeted benefit). If you leave the company, any pending LSA balance is usually forfeited as well.

Portability #

LSAs are not portable because they’re not individual accounts

They’re simply a feature of your employer’s benefit and compensation plan. If you change jobs, you can’t take any remaining LSA money with you or continue to get reimbursed by your old employer, of course. It’s a “use it while you’re here” type of perk.