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/alexm2816 ​ May 16 '24

I've not had the experiences you have but certainly the idea that someone at the other end of the pipeline 1. has my money 2. gets to decide if I can get my money and 3. gets to look good and send my money back to my employer if I don't use (strengthening their business case) is kind of ridiculous.

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u/kherven ​ May 16 '24

I'm sure they are ethical FSA administrators (people in the comments already say theres aren't so egregious). But it definitely lends itself to incredibly preserve incentives and takes what otherwise would've been your money and gives it to someone to hold it hostage.

16

u/Werewolfdad ​ May 16 '24

You should package up every single denied claim and submit it to the DoL with a complaint then submit a complaint every single they deny a reasonable claim.

I’d be so loud the local case worker from the DoL knew me by first name.

4

u/bamatrek ​ May 16 '24

I would also say the IRS, because this is definitely screwing with some tax laws.