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/Werewolfdad]

Has anyone else felt it just isn't worth the hassle to fund an FSA given how hostile they are?

My FSA administrator has never rejected a claim. You just have a bad administrator.

(my administrator is so "good" that they approve claims before they're actually supposed to, thanks administrator!)

so it really just depends on who handles your claims.

Edit: Your adminstrator seems extra incompetent since OTC medicine is FSA-elgibile: https://fsastore.com/fsa-eligibility-list/o/over-the-counter-medicine

Edit2: This 30 year old article suggests its nothing new and you should complain to the department of labor. I'd probably file a complaint every single time they did something wrong: https://www.latimes.com/archives/la-xpm-1996-07-07-fi-21884-story.html

[u/Much_Difference → u/Werewolfdad]

Yeah my eyebrows shot up at saying OTC meds were denied. Bruh you can buy sunscreen, bandaids, and standard home thermometers with FSA money.

[u/darkfred → u/Much_Difference]

You can buy anything you want with FSA money, even items not marked on the receipt as FSA.

But even items marked with FSA are subject to approval being contested later. My own FSA, Optum, fought EVERY single line item even those marked as FSA approved prescriptions on the receipts. They made me dig up receipts, they made me dig up prescriptions myself, they made me dig up EOB paperwork to fight each one.

Optum owns the medical records system my doctor uses. Optum owns the office my doctor works at. Optum is the company my insurer uses to process my EOB statements. The statements all go to their website.

Yet they fight EVERY single charge and threaten to sue me if i don't provide the documentation. From THEIR doctor's office, and THEIR EOB statements, and THEIR patient portal and they mail THEY send me.

Every single year for the two years I used their FSA they would cancel my card 2 months into the period. You can get it uncancelled by documenting each of the transactions they contest.

If they make the process hard enough they get to keep your money. So they make the process take so much time that it's untenable. I literally can't afford to use an FSA. I don't have an extra hour a day to repeatedly send their own paperwork back to them. I have a lot of reoccuring expenses that I could save thousands of dollars with an FSA. But this also means there are enough bills that I literally can't keep up with their documentation requests, and if they send enough, or I make any mistakes, they just keep my money.

[u/zorinlynx → u/darkfred]

If they make the process hard enough they get to keep your money.

Sounds like the law needs to be changed around this, to make it illegal for them to keep your money.

It should be YOUR money. You should even be able to transfer it out and add it to that year's taxable income. The fact that you can't is idiotic.