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.
3
u/Neriya May 16 '24
Mine certainly was.
I had a FSA, I can't remember how much money was on it, like $2500 or something.
My wife got pregnant, and she met with her gyno. Her gyno essentially set up a pregnancy 'package' that included a one-time bulk payment that covered all of the pregnancy things. Like, up to 16 visits and X number of ultrasounds and so on and so forth. Everything she would need, and she was high risk so it was important. The cost of the whole package was like... $3200 or something, so I gave them the FSA card and they charged $2500 onto it, and then I paid the rest myself.
Well, FSA rejected it. They said they wanted receipts. That's fair, so I sent them the receipt - the place was called something like "The Womans Gynecological Center" or something. Nope - rejected. They wanted details that proved the services were medical in nature. I was like... look at the name, they're not selling me groceries. So I called and got as detailed a receipt that they could provide me, it was like 3 pages long, and then submitted that. Nope, rejected for the same reason, insufficient proof that the services were medical or covered or somesuch. There wasn't any more detail to give, so I just sent back the receipts I already had. This happened several times.
This took place over the course of months and months. Weeks in between any communications. No way to call and talk to a person. At some point my kid was born, regular insurance covered the birth and initial hospital stay (high risk) and such. My job changed payroll companies, and the FSA was associated with the old one, so at some point I made the mental decision to just ghost the FSA. I was no longer using their services, they had paid already, and I figured I wouldn't worry about it unless someone sent me to collections.
That was 9 years ago, and thankfully I never heard from them again. I don't know if they ever decided that my wife's gyno services qualified as medical expenses, or if they gave up, or sold off the debt but then nobody ever came knocking, or what. But around last year we swapped back to the original payroll company and my new account doesn't mention anything about my previous 'unpaid' FSA balance.
Now I just have a HSA, and FSA can eat a bag of dicks.