What Happens to Your Dependent Care FSA If You Lose Your Job

If you're losing your job, your Dependent Care FSA is probably not top of mind — but unused funds can be forfeited if you don't act. Here's what actually happens.

No COBRA continuation

A Health FSA can sometimes be continued under COBRA after you leave a job. A Dependent Care FSA cannot — participation simply ends when your employment (and your status as a plan participant) ends. You can't keep contributing, and you can't elect COBRA to keep the account open.

You can only claim what you've contributed

Unlike a Health FSA, where your full annual election is available from day one, a Dependent Care FSA generally only reimburses you up to the amount you've actually had deducted from your paychecks so far. If you elected $6,000 for the year but only had $2,000 deducted before leaving, $2,000 is your ceiling — regardless of expenses you've already incurred.

You can still submit claims for eligible expenses incurred while employed

Expenses for care that happened while you were still an active employee and plan participant are generally still reimbursable after you leave, up to your run-out deadline (often 60–90 days after termination, but check your specific plan document). Submit any outstanding claims promptly — don't assume your access to the claims portal will last indefinitely.

Unused funds are typically forfeited

Money left in the account beyond what you can claim for eligible expenses is forfeited back to the plan — this is the same use-it-or-lose-it rule that applies at the end of any plan year, just triggered early. See the FAQ for more on grace periods and run-out rules.

What to do right away

• Check your plan document or ask HR for your exact run-out deadline.
• Gather receipts for any eligible care expenses already incurred and submit claims before losing portal access.
• If you're starting a new job with its own Dependent Care FSA, you generally cannot roll funds over between employers — a new election with the new employer starts fresh.