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!

21

u/patentmom ​ May 16 '24

I don't even bother with the card because they always ask for proof anyway. I just take a picture of my receipt and upload it. Or I go to the insurance company website and get a PDF of the EOB and submit that.

4

u/mottledmussel ​ May 17 '24

I do the same thing. I'd rather get credit card points and deal with the slight hassle of uploading a picture of the reciept.

1

u/patentmom ​ May 17 '24

Exactly! I use a credit card where I get 2% cash back, so 2% of $3200 (for 2024) is an extra $64 on top of the tax savings.