How FSA Bridge Payments Work When You Change Jobs
What an FSA bridge payment is and when you get one
An FSA bridge payment is money your employer sends to cover medical expenses you incurred during the year but haven't yet been reimbursed for. It bridges the gap between when you leave a job and when you lose access to your Flexible Spending Account. The payment is not new money — it comes from the FSA balance you built up through payroll deductions while you were employed.
You receive a bridge payment only if you have an outstanding balance in your FSA when you separate from your employer. The payment covers claims you submitted before your last day of work, even if the reimbursement hasn't processed yet. Once you receive it, your FSA account closes and you cannot submit new claims to that account.
Bridge payments are not automatic. Your former employer's benefits administrator or the FSA plan administrator must process your claim and send the funds. This typically takes two to four weeks after your separation date, though timing varies by plan.
Key Takeaways
- A bridge payment reimburses medical expenses you already incurred and claimed before leaving your job, using money you deducted from your paychecks.
- You only receive a bridge payment if your FSA has an outstanding balance when you separate from your employer.
- Bridge payments are not automatic — you must submit claims before your last day of work, and the plan administrator must process them after you leave.
- Once you receive a bridge payment, your FSA account closes and you cannot submit additional claims to that account.
- If you start a new job with FSA coverage, you can open a new FSA account, but bridge payments from your old account are separate and unrelated.
How to submit claims before you leave your job
Submit all medical expense claims to your current FSA plan administrator before your last day of work. Include receipts, invoices, or explanation of benefits (EOB) forms from your healthcare provider or pharmacy. The claim must be dated before your separation date — expenses incurred after you leave cannot be submitted to your old FSA.
Contact your benefits administrator or HR department to find out the exact deadline for claim submission. Some plans allow claims to be submitted up to 30 days after separation, but this varies. Do not assume you can submit claims after you leave — confirm the window while you are still employed.
Keep copies of everything you submit. If a claim is denied or lost, you will need the documentation to resubmit or dispute it. Write down the date you submitted each claim and the name of the person who received it, if possible.
What happens to unused FSA money when you leave
Money in your FSA that you do not claim before your account closes is forfeited. This is called the use-it-or-lose-it rule, and it applies to all FSA accounts. Unlike a health savings account (HSA), you cannot roll FSA funds into a new account or carry them forward to the next year.
For this reason, estimate your medical expenses carefully before the end of the year. If you know you are leaving your job, review any pending medical appointments, prescriptions, or procedures and submit claims for them before your last day. Dental work, vision exams, and over-the-counter items like pain relievers and bandages are often FSA-may be able to access and can be claimed if you have receipts.
If you have a large FSA balance and are unsure whether you will use it, ask your benefits administrator for a list of FSA-may be able to access expenses. This can help you decide whether to spend down your account or accept that some funds will be forfeited.
Timeline for receiving your bridge payment
The timeline for a bridge payment depends on when you submit your claim and how quickly your plan administrator processes it. Most payments arrive within two to four weeks of your separation date, but some plans take longer. A few factors affect the speed:
- Whether you submit claims before or after your last day of work
- How many claims are in the queue at your plan administrator
- Whether your claims are complete (missing receipts or information can delay processing)
- The payment method your plan uses (direct deposit is faster than check)
Contact your plan administrator to ask for an estimated timeline specific to your situation. If you do not receive your bridge payment within six weeks of separation, follow up in writing with the plan administrator and include your employee ID, separation date, and the date you submitted your claims.
Bridge payments and your new job's FSA
If you start a new job that offers FSA coverage, you can open a new FSA account during that employer's open enrollment period or within 30 days of your hire date (if you are a new employee). Your new FSA is a separate account from your old one, and the bridge payment from your previous employer does not affect it.
You will need to make new payroll deductions for your new FSA. The amount you deduct is independent of what you deducted at your previous job. You can choose a different amount based on your anticipated medical expenses at your new employer.
Do not assume your bridge payment will arrive before you need to pay for medical expenses at your new job. If you are waiting for reimbursement from your old FSA, plan to pay out of pocket for new medical expenses and use your new FSA to reimburse yourself once it is funded.
What to do if your bridge payment is delayed or denied
If you do not receive your bridge payment within the expected timeframe, contact your former employer's benefits administrator or the FSA plan administrator directly. Have your employee ID, separation date, and the date you submitted your claims ready. Ask for the status of each claim and whether any documentation is missing.
If a claim is denied, ask for the reason in writing. Common reasons include: the expense was not FSA-may be able to access, the receipt was incomplete or illegible, or the claim was submitted after the deadline. If you believe the denial is incorrect, you can dispute it by submitting additional documentation or a written appeal to the plan administrator.
If your former employer is no longer in business or the plan administrator cannot be reached, contact your state's Department of Insurance or the U.S. Department of Labor for guidance on how to recover your FSA funds.
FSA bridge payments and taxes
Bridge payments are not taxable income. Because the money came from your pre-tax payroll deductions, it is already been excluded from your taxable wages. You do not report bridge payments on your tax return, and your former employer should not issue a 1099 or other tax form for them.
If your former employer does issue a tax form that includes FSA reimbursements, contact them to correct it. FSA reimbursements should never be reported as income.
Frequently Asked Questions
Can I get my FSA bridge payment if I was fired or laid off?
Yes. Bridge payments are based on claims you submitted before your separation date, regardless of how your employment ended. Submit all may be able to access claims before your last day of work, and the plan administrator will process them after you leave.
What if I forgot to submit a claim before I left my job?
Contact your plan administrator immediately and ask whether claims can be submitted after separation. Some plans allow a grace period of 30 to 60 days after your last day of work. If your plan does not allow late submissions, that expense cannot be reimbursed from your old FSA.
Do I have to pay taxes on my FSA bridge payment?
No. Bridge payments are reimbursements of pre-tax money you deducted from your paychecks, so they are not taxable income. Do not report them on your tax return.
Can I roll my FSA balance into an HSA or my new job's FSA?
No. FSA funds cannot be rolled over or transferred to another account. Any balance remaining after you submit all claims is forfeited. This is different from an HSA, which you can carry forward indefinitely.
What counts as an may be able to access FSA expense?
may be able to access expenses include copays, deductibles, prescription medications, dental work, vision exams, and many over-the-counter items like pain relievers, bandages, and cold medicine. Your plan administrator can provide a full list. Expenses for cosmetic procedures, gym memberships, and vitamins are generally not may be able to access.