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Free Money in my FSA Account

I found another silver lining in my company’s decision to lay me off. I’ll actually get a few hundred free dollars from my FSA account. My FSA account is pre-funded so I am able to spend the entire amount at any point in time throughout the year.


I have roughly $1,000 remaining in my account, but the entire amount will be utilized to cover the costs of copays and hospital bills related to the birth of my son. Since all of these expenses were incurred prior to my lay off date I can expense them all through the FSA plan.

Normally I would make contributions to the account with every paycheck, but this year I’ll be laid off before I can make the final four payments. I contribute roughly $160 each pay period to FSA, which means I’ll forgo paying the remaining $640.

If I hadn’t used all of the funds before my termination date I could have extended my FSA account through a COBRA plan, but I’d have to pay to continue with post tax dollars, which defies the purpose of using an account like this in the first place.

Luckily I used all of my medical dollars well in advance of my termination date, so I am able to use the entire pre-funded amount without having to contribute all of the money.