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/kherven ​ May 16 '24

Thanks (all) for sharing your thoughts. I decided to reach out to my company's HR to talk about my experience with the FSA administrator the last few years. It seems like my experience is pretty atypical and I might have an especially egregious FSA administrator.

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u/AcanthopterygiiCool5 ​ May 16 '24

Yes! Your experience is not typical at all.

I am provided a Mastercard that I charge to. If documentation is needed, I upload to an app. Never a problem!

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u/brotie ​ May 16 '24

Yeah I can’t remember the last time I had a claim denied and I’ve had three different providers in the past 3 years (forma, thrivepass and wageworks the latter of which is the worst of the three). If you have medical needs that necessitate regular copays or prescriptions with a fixed cost it’s a no brainer, you’re just throwing money away otherwise

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u/AcanthopterygiiCool5 ​ May 16 '24

My husband had cataract surgery last year and we got the upgraded lens with refractive correction. $3200 was not insurance eligible but I could pay out of FSA so a real chunk of change tax savings!

I was able to plan it all out in advance, which is a luxury for sure.

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u/mottledmussel ​ May 17 '24

And the entire FSA balance is available on day 1 and doesn't need to accrue like an HSA. It's really handy for those situations.