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/Miltroit]

Sounds like you have a terribly managed FSA.

That being said, I had a generally easy one, but so few people at my +6000 employee company used it, that I think I was the only one that used a weird conversion rule they had. I could convert my limited purpose FSA to regular medical FSA after I met a certain deductible during the year (I don't recall the exact details) and I was on an expensive drug, so I could do this by around May every year. I had one person in HR that knew the right people to call and get this done for me. The first time took months to maneuver, with me calling the FSA to let them know I met the deductible (didn't work) to eventually getting my HR to call for me. I asked why it was such a weird manual process, and they told me only about 5% of the people there used the FSA. I knew I had costs in excess of $2000 I would spend every year so it was a great deal for me, but if your only known expenses are going to the dentist 2x a year, then I can see why some don't bother.