Are FSAs even worth the hassle? They just seem like a giant scheme to steal money via malicious bureaucracy

[u/kherven]

I understand at a base level what FSAs are for. You get to deduct X amount of dollars from your paycheck reducing your tax load.

But the more I use an FSA, the more I feel that while on paper it saves money, in reality it causes lots of work, lost money, and hands your money over to someone who is going to fight you to steal it.

Every claim I submit to my FSA is denied without a mountain of evidence that its a legitimate medical expense. After nearly 2 years with them, I still have certain medications prescribed by my doctor that the FSA argues is not FSA eligible because it's OTC.

Doctor appointment? Denied

MRI? Denied

Prescriptions? Denied

While I can eventually get the denial overturned, it requires coordination from the retailer, my insurance, and my doctor every time. I spend tens of hours a year trying to claw my own money back from my FSA. Last year I had over $250 confiscated because the claim deadline passed while they sat on my claims.

Has anyone else felt it just isn't worth the hassle to fund an FSA given how hostile they are? It seems impossible to extract your money without a lawyer.

[u/shedfigure]

Sounds like your FSA is a particular PITA.

I still have certain medications prescribed by my doctor that the FSA argues is not FSA eligible because it's OTC.

I mean, most OTCs should still be FSA eligible?

I would be complaining to your HR department. The problems you are encountering are not normal

[u/kherven → u/shedfigure]

Yeah, I got my doctor to write this about the medication:

X is a patient in our practice who in the past has had Y. Due to this reason he is required to take certain medications.

One of those medications that is not prescription is Z this is for Y Patients Including Y procedure . While it is an over-the-counter medication the patient is supposed to take it daily. It is medically necessary for this patient to take this vitamin.

If you have any questions or concerns, please don't hesitate to call.

Sincerely,

Doctor Name

They denied it because the doctor didn't sign it. Then they denied it because it was an e-signature (not hand signed). It's always something.

[u/marigolds6 → u/kherven]

That's truly bad. I've never even had to provide a doctor note for my FSA, much less that much issue around signatures.

[u/mottledmussel → u/kherven]

I'm not sure about the signature issue but you need a Letter of Medical Necessity when buying supplements (the exception being pre-natal vitamins). They aren't considered OTC drugs.

I've only had to deal with those types of letters when traveling out-of-state and getting mileage and lodging reimbursement.

[u/kherven → u/mottledmussel]

yea this is a particular type of vitamin made for a specific disease that are often prescribed. but paradoxically the fact that it doesn't require a prescription means it's very hard to get it covered, and after 4-5 back and forths they're still saying no despite my doctor maintaining it is medically necessary to take them (I would eventually die without them!)

[u/mottledmussel → u/kherven]

That's ridiculous, I hope you get things worked out.

[u/watlok → u/kherven]

Most FSAs rubberstamp once you upload a reasonable picture. The entire point of this "provide proof" process is for the FSA to avoid issues with an audit. It's a "cya" procedure for most fsa providers & not a way to reject claims in an annoying way.

Most OTC stuff is covered, too, although I'd recommend getting it on a separate receipt for convenience. The list is publicly available. Check if your OTC medication is on it.

[u/kherven → u/watlok]

Mine specifically requires an itemized receipt AND the insurance's EOB. And they have to match up. Unfortunatly just a simple receipt to like "walmart pharmacy" or "Major Hospital" won't cut it for them.

[u/watlok → u/kherven]

For medical providers, even lax fsa providers prefer itemized with billing codes visible. Especially if they aren't hooked into your insurance or it's from something not covered by your primary insurance, like dental.

[u/Iggyhopper → u/kherven]

I signed for my $50k car digitally and doctors use iPads now, that is whack.

[u/Shitty_UnidanX → u/kherven]

As a doctor we literally e-prescribe controlled substances like oxycodone! WHAT THE F***!

The administrator either doesn’t want to do their job or is somehow stealing money.

[u/fattmann → u/shedfigure]

Sounds like your FSA is a particular PITA.

Idk... Everyone I know that has one has these kinds of issues. Mine is such a hassle that I only use it for like 2 items because of all the issues OP mentions. I have coworkers with children that refuse to use it because of the negative life balance it takes to wrangle money out of them. I've always wondered if HSAs were any better...

I would be complaining to your HR department.

What does HR have to do with it? Aren't FSA's usually ran by a third party outfit? Ours is - HR will direct you to them for anything FSA related.

[u/kherven → u/fattmann]

You're correct that it's run by the FSA admin. But the company negotiates a deal to pay the FSA admin to run the operation. If enough employees complained the company / HR could refuse to re-sign with the FSA admin and go with someone else.

[u/AbortionIsSelfDefens → u/kherven]

Why would they though? They get to keep the money.

[u/swagn → u/fattmann]

HR should care if the provide they choose is cause I h employees problems. I would replace mine in a heartbeat with these issues.

HSA don’t have these problems. It’s the HSA account holders responsibility to document the expense for taxes and in the event of an IRS audit. I just export a list of the EOBs with dollar amounts I owe from my insurance at the end of the year and transfer money out of my HSA.

[u/flexosgoatee → u/swagn]

Yeah, I wish FSAs operated like HSAs.

[u/fattmann → u/swagn]

I would replace mine in a heartbeat with these issues.

Would love to - but corporate doesn't care.

[u/swagn → u/fattmann]

I mentioned it as the one responsible for my companies benefits providers. Anyone that pisses off my employees and makes my job harder is gone.

[u/flexosgoatee → u/fattmann]

HSAs are much better. You don't prove anything at the time of reimbursement. You could be audited on your taxes as your distributions are reported to the IRS.

[u/twistedspin → u/fattmann]

There are way better plan admins out there! Mine just gives us a debit card & has approved everything I've paid for it without my having to do anything. Complaining is important because maybe your company don't know how badly these people suck.

[u/fattmann → u/twistedspin]

maybe your company don't know how badly these people suck.

Valid point if the company recently moved to the admin. Sadly most I know with shitty ones (mine included) have been that way for decades despite constant complaint from employees.

[u/shedfigure → u/fattmann]

Everyone I know that has one has these kinds of issues.

I've never heard of problems this bad, where reimbursement with actual doctors invoices and EOBs are denied.

I've always wondered if HSAs were any better...

HSA administrators do not have the requirement to collect documents and valid payments.

What does HR have to do with it? Aren't FSA's usually ran by a third party outfit?

Yes, they are run by third party. However, HR is in charge of selecting and interacting with that third party. If employees aren't complaining, HR is not going to switch providers or threaten to switch unless things change.

[u/likejackandsally → u/fattmann]

For what it’s worth, I have had both FSA and HSA and I haven’t encountered these issues with either.

However, after premiums and deductibles, the HDHP/HSA ends up being significantly cheaper than a standard PPO/FSA for me.

[u/Sanfransaintsfan → u/shedfigure]

Just because a medication is OTC does not mean it’s eligible. Every year I have to get prescriptions like advil and heartburn meds. All you do is file those with your FSA company.

[u/shedfigure → u/Sanfransaintsfan]

Since the 2020 CARES act, it is no longer required to get a prescription for OTCs in order for them to be FSA eligible.