you have a complicated situation. generally the IRS and the plan have a use it or lose it rule. money in a 2016 FSA not used by year end is forfeit back to the employer. However, there could be complications. some plans, under IRS rules, allow a carryover to the following year either an amount not to exceed $500 or the money can be used no later the 2.5 months after the year end to pay either 2016 or 2017 medical bills.
in the worse case scenario, the IRS would say you have taxable income because the FSA contribution reduced your taxable wages. If you still have the same employer, you may want to talk to the Human Rsource Department or perhaps the administrator.
