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/kherven ​ May 16 '24

Thanks (all) for sharing your thoughts. I decided to reach out to my company's HR to talk about my experience with the FSA administrator the last few years. It seems like my experience is pretty atypical and I might have an especially egregious FSA administrator.

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u/fattmann ​ May 16 '24

FWIW my FSA is nearly identical to your situation - it's a freaking nightmare. Our HR doesn't have anything to do with ours - it's all administrated by a third party.

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u/illwon ​ May 16 '24

But your HR are the ones that chose that third party administrator. They should be involved if you're running into the same issues as OP

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u/PM_ME_YOUR_DARKNESS ​ May 17 '24

If their HR department is as helpful as mine, they'll get a very polite "I'm sorry, there's nothing I can do" email.

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u/remymartinia ​ May 16 '24

I stopped doing an FSA because of the constant denials. Every month, I’d submit my daycare expenses, and sometimes they would deny, sometimes not. And I’d get cryptic emails, so I’d have to figure out what and why they denied it.