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Why the benefits of your flexible savings account are not as great as they may be

Pamela Herd and Donald P. Moynihan are professors at Georgetown University’s McCourt School of Public Policy. Many people are trying to use up their flexible savings accounts before the new year deadline. By one estimate, consumers lost $4.2 billion in unspent FSA funds in 2020. In practical terms, FSA programs waste a lot of user time and money. Almost half the 21.6 million Americans with FSAs forfeited money in 2020, with an average loss of $408. Submitting an expense request often involves photocopying, scanning and uploading receipts.