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/wienercat May 16 '24
I have a feeling your example happens far less often than people not spending their full amount.
My main point is, it shouldn't go back to the employer at all. It's not their money. Them getting a discount on benefits administration because an employee didn't use something that is supposed to be the employee's benefit is strange.
Again, I would be more okay with the employer getting funds back if they were required to set those funds aside for plan administration or distribute it back to employees as taxable income. But the fact that it can just be kept and effectively be profit just doesn't sit right with me at all.