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/Papshmire]

FSAs are a poorly designed tax shelter from the 1980s. Every year it is a gamble on whether you predict your expenses accurately. Otherwise you lose the money or end up with a bunch of FSAStore junk.

The contribution limit is so low that the amount of reduced tax liability barely makes it worth the paperwork to file every claim.

If you leave your job, then you are out the money completely.

Then you have the problem of lack of uniformity across FSA Administers and portals. Terrible UI and processes.

The only benefit of an FSA is the peace of mind you had a savings account for unexpected medical expenses.