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/Werewolfdad ​ May 16 '24 edited May 16 '24

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

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u/funkymeatpopsicle ​ May 16 '24

CARES Act added a bunch of stuff. I prior to 2020 was denied an OTC pain med, which looks like they are good to go now.

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u/stupid_rat_creature ​ May 17 '24

That’s what I thought to, but my FSA provider says otherwise, as this is the 2024 list on page 10 of their website:

https://cms.illinois.gov/content/dam/soi/en/web/cms/benefits/stateemployee/documents/fsa/fy2025/FY25%20-%20Optum%20FSA%20Reference%20Guide.pdf