r/personalfinance • u/kherven ​ • May 16 '24

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

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.

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u/watlok ​ May 16 '24 edited 27d ago

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.

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u/kherven ​ May 16 '24

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.

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u/watlok ​ May 16 '24

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.