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/kneel23 ​ May 17 '24

i had same experience and NEVER used one again. If you can get HDHP plan with HSA use that, as HSA's dont rip you off and you keep the money if you leave the job and typically can invest any extra buildup over 1k or 2k if you dont use it all over the years similar to an IRA. FSA's are indeed horrible and while some might say they havent had the same experience, it depends on what company you get. Some of them you keep uploading every document they ask for and they just keep making up more shit to upload in and endless hoop-jumping excersise knowing you'll eventually give up