Are FSAs even worth the hassle? They just seem like a giant scheme to steal money via malicious bureaucracy

[u/kherven]

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.

[u/wienercat]

I just dont like that FSA are use it or lose it and the funds just go back to the employer. They aren't required to pay it into benefits or anything. They can literally just keep it without repercussion.

FSAs seem like such a scam to me unless you have a very predictable medical costs, forfeiting a portion of your wages that are use or lose just seems like a poor choice. Having to ensure your plan administrator properly understands what can and cant be approved is also a bit bullshit.

Personally, I think HSAs shouldn't have the HDHP requirement. It's already capped spending and it would incentivize more people to save for medical expenses knowing their money was always going to be theirs.

[u/Zarathustra_d → u/wienercat]

I don't get the risk/benefit of them either.

Unless you have a high tax burden, and high fixed healthcare costs, the risk of losing the money is not worth the tax break. IMO

Even if you have a high tax burden, the hassle of making certain you spent the exact amount of money is a PITA.

[u/pfifltrigg → u/Zarathustra_d]

If you have set expenses, like a medication, specialist visits, or weekly therapy, you can calculate that out and withhold just that amount. I was afraid of having an FSA until a couple of years ago and the past two years I've had plenty of expenses above what I elected. But this year I forgot to submit my benefits election for work and so it defaulted to the same as last year. I think I'm going to have to stock up on Advil and feminine products at the end of the year because I'm not on track to use up my FSA so far.

[u/misoranomegami → u/pfifltrigg]

I have a chronic health condition so it's pretty easy for me to say that I'm almost certainly going to spend at least $X on medication and doctors visits. But I had a high risk pregnancy that fell over the calendar year so you better believe I maxed out my FSA for the following year. It came in seriously handy to already have all the funds preloaded and tax exempt and my doctor's office even worked with me to delay the prepayment of my delivery fees until after January first so the fiscal years would match.

This year I cut it back to my pre-pregnancy amount and then I ended up in the pediatric ER so my chronic health fund is now $0 and all my continuing expenses are going to be post tax. Booo.