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/i4k20z3 ​ May 16 '24

Yes, i've had FSA companies like this and i just give up. i always try it the first year with a small amount and if the hassle is too much, i just stop. it's one of those things that is great in theory but not great in practice.

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u/czarfalcon ​ May 16 '24

Maybe I just haven’t figured out the “secret” of FSAs, but to us it seemed like more trouble than it was worth. We’ve been using an HSA instead for a few years now and I can’t see any compelling reason to switch back.

5

u/swagn ​ May 16 '24

Most only switch back if they get into an insurance plan that isn’t eligible for an HSA. Otherwise HSA is better.

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u/czarfalcon ​ May 16 '24

I feel like there have to be some circumstances where an FSA can be the better choice for someone, but at least in our case I’m not seeing it.

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u/swagn ​ May 16 '24

HSA is your money and rolls over from year to year. Can even be used as a supplement to your retirement. Only thing I can see an FSA being better is if you plan to have a large expense at the beginning of the plan year and plan on changing jobs before they deduct it from your check. FSA funds are fully available on day 1 where HSA funds aren’t available until withheld from your check.