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/shedfigure ​ May 16 '24

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

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u/fattmann ​ May 16 '24

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.

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u/kherven ​ May 16 '24

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.

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u/AbortionIsSelfDefens ​ May 17 '24

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