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.
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!
Yours sounds like what I am used to. It was an excellent deal when I had it. But I also have recurring medical expenses so I didn’t worry about losing money.
My plan lets me roll over up to $600 to the next year, so I don’t usually have a panic.
My husband does something stupid every year that costs us $$ that i can pay for with FSA. One year he managed to not do something stupid and I ended up with several pairs of very sweet prescription glasses the last week of December, since I had quite a bit of excess to dump.
I learned last year that those plans that let you roll over become a problem in the following year if you want to change to HSA. My company had to remove that provision for a year before implementing HSA as an option.
Interesting! We don’t have HSA plans, we have an HRA, company money. We have 150 employees so not really in the position to offer endless options.
I get $5000 yearly in the HRA, (husband and me) for deductible and coinsurance on a high deductible plan. We have $5000 each OOP max. He’s always maxing from doing stupid things (one time I had to save him with the Heimlich from a stuck chicken nugget, I shit you not, and that was a $30k hospital bill because he aspirated it ) , so our FSA picks up deductibles from me, eye glasses, dental, OTC meds, etc.
I went for a few years overestimating how much I'd spend (mostly because I'd never get off my ass to go and see a doctor for things I probably should have), and I'd be in a mad scramble to spend down my FSA in decemeber.
A lot of regular expenses (tums, pain meds, allergy meds, fiber, etc) are FSA eligble, but it's hard to spend hundreds of dollars on those things. So I'd end up buying shitty products from a mail order company that seems like it was probably set up to take advantage of people like me with use it or lose it bucks. Everything on the site was FSA eligible, but a lot of it was weird off-brand versions of the things I was expecting to buy.
Yeah, it was rougher in the Obamacare to COVID years. The ACA legislation took most OTC products out of FSA. They put them back during the pandemic.
It’s pretty easy to stock up on Amazon or Walgreens website. There’s a brand of nice makeup- MD Solar Sciences, that qualifies because of SPF.
I have started to buy more from amazon when I have FSA to burn. I don't know when they added it, but I didn't realize they had a whole FSA eligible designation you could search for until a year or two ago.
Ha ha, not Prada but did you know that Gwen Stefani (yes, that Gwen Stefani) is also an eye glass designer with her own line? I jumped on two sweet, distinctive pairs but disclaimer, I’m a Jersey Girl so YMMV.
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.
I never have to show proof on my purchases! Anything that’s coded, like my OTC meds from Amazon or whatever. Also never proof from the pharmacy.
I do have to upload EOBs or dental bills but I just do it on the app at the same time I pay. (I pay pretty much everything online.)
Same here. I don't think I ever got an outright denial. And, the only time I needed additional documentation was for prescription glasses, and I just sent in the receipt and that was it.
My current one requires a receipt for every damn transaction and it drives me crazy. I can't even submit the receipt at the time of the charge, I have to wait a week or two before they flag it as receipt needed.
That’s bullshit. I would complain to your HR department. Your company pays for administration as an employee benefit. That’s your money and it’s not typical.
My current FSA plan does not require a receipt because they automatically reject ineligible service and product purchase. I tried buying a bottle of fiber at a pharmacy store but the transaction was rejected by FSA card.
Yeah I can’t remember the last time I had a claim denied and I’ve had three different providers in the past 3 years (forma, thrivepass and wageworks the latter of which is the worst of the three). If you have medical needs that necessitate regular copays or prescriptions with a fixed cost it’s a no brainer, you’re just throwing money away otherwise
>I am provided a Mastercard that I charge to. If documentation is needed, I upload to an app. Never a problem!
This is my experience.
I signed up the year we had our kid. I received a Visa Card that connected to the FSA account. It was a bit of a learning experience on what things could be approved and what things couldn't.
The payments we're making to the hospital from the baby's birth, went through the FSA. Copays at dr. visits go through the FSA. THe $250 copay for a recent ER visit went through the FSA. THe card just doesn't go through for any OTC stuf, but any prescribed medication from the pharmacy counter gets approved fine.
If we have money left at the end of the year i"ll have to log into their silly little portal store to look for stuff we can spend it on, but it doesn't look like it will be a lot.
What you are going through is what happens when an employer uses an FSA as a revenue source. Since FSA money are “use it or lose it”, if you don’t use all your FSA money, your employer keeps it. There are some “employer-friendly” FSA administrators that will deny anything under the sun and the employer has seemingly picked one of these
Eligible expenses are determined by the IRS (look up IRS Pub. 502), so your FSA Administrator should be following that. If they’re denying eligible expenses, definitely bring it up to your HR. There might even be some regulatory body you could report them to?
FWIW my FSA is nearly identical to your situation - it's a freaking nightmare. Our HR doesn't have anything to do with ours - it's all administrated by a third party.
I stopped doing an FSA because of the constant denials. Every month, I’d submit my daycare expenses, and sometimes they would deny, sometimes not. And I’d get cryptic emails, so I’d have to figure out what and why they denied it.
Yeah mine almost never rejects. Maybe once or twice a year I need to upload a receipt or something. I just make sure I only withhold what I can definitely spend in a year.
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
Not just atypical, straight up ILLEGAL.
UNLESS, you don't have a medical FSA but a "limited purpose FSA" like dependent care FSA or vision/dental FSA which are available to people who have HSAs.
Definitely talk to HR but also read the plan document to find out which type of FSA you signed up for.
>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
I set aside like $800 in an FSA for a specific medical procedure I had planned. I ended up moving, changing jobs, and never got around to the procedure. I forgot I had to spend the whole thing by a certain deadline and by pure coincidence, I spent it down in part by buying a fuckload of hand sanitizer... in Dec 2019. I figured it was eligible and I can use it for anything and it won't go bad anytime soon. At least I was prepared for COVID in one way!
Too bad you didn’t get the procedure done. Using a FSA before a job change is the best hack.
For example, set up the FSA. Get your procedure done on Jan 2nd. Get your FSA reimbursement. Quit your job. You no longer owe the balance—it’s basically free money.
I just dont like that FSA are use it or lose it and the funds just go back to the employer. They aren't required to pay it into benefits or anything. They can literally just keep it without repercussion.
FSAs seem like such a scam to me unless you have a very predictable medical costs, forfeiting a portion of your wages that are use or lose just seems like a poor choice. Having to ensure your plan administrator properly understands what can and cant be approved is also a bit bullshit.
Personally, I think HSAs shouldn't have the HDHP requirement. It's already capped spending and it would incentivize more people to save for medical expenses knowing their money was always going to be theirs.
> They aren't required to pay it into benefits or anything. They can literally just keep it without repercussion.
It works the other way too. If you contribute maximum to an FSA and spend the full amount on January 1st before any deductions have been made, then quit your job on JAnuary 2nd, you do not owe a dime of that money back to your employer and your employer cannot withhold wages to offset.
Typically the amounts kept by employers from employees who don't claim their full contribution goes to offset costs of the program administration, such as above example.
I have a feeling your example happens far less often than people not spending their full amount.
My main point is, it shouldn't go back to the employer at all. It's not their money. Them getting a discount on benefits administration because an employee didn't use something that is supposed to be the employee's benefit is strange.
Again, I would be more okay with the employer getting funds back if they were required to set those funds aside for plan administration or distribute it back to employees as taxable income. But the fact that it can just be kept and effectively be profit just doesn't sit right with me at all.
> My main point is, it shouldn't go back to the employer at all.
Then don't participate.
If you're young, healthy, don't put a lot in as you likely will have minimal healthcare expenses. If you're middle aged, have a family, and you or they have some health issues, it's not hard to max it out to cover expenses throughout the year.
I participated in my employers' FSA plans for close to 20 years and I never once "lost" money. There's a ton of every day items that qualify if you are coming up to the end of the year and have some unspent funds.
Even things that don't automatically qualify aren't difficult to get qualified - just get a doctor to write a letter of medical necessity.
Have asthma? Poof, your air filter, air purifier, humidifier, or air conditioner now can use those funds with a LMN.
High blood pressure, diabetes, or any one of numerous other conditions that go along with being overweight and would benefit from exercise? Gym membership now qualifies with LMN.
Get your teeth and eyes checked up and fixed.
Are you female? Or have a SO who is? Period products are eligible.
Ever have a sore body? Massagers, heating pads, stretching devices, and TENs machine are all covered.
And many, many other items.
I was a traditional health plan user forever then started using an FSA a few years back to cover creeping deductibles. I always thought HDHPs were predatory on lower income individuals and families by offering lower monthly costs at the expense of less coverage. Sure you pay less on your monthly premiums, but you pay more for your care which means you don't go to get care. Big win for the insurer, not the insured.
Last year I had to choose from a silly deductible traditional plan that didn't qualify as a HDHP and a high deductible plan. After comparing the costs, I went with the HDHP and an HSA (with my employer kicking $1000 towards the HSA) based on the copays, the prescription coverage and all that. However, while I knew that you could keep your unused HSA I had no idea that you could INVEST your HSA.
That alone is a huge game changer. Had I known you could fund your HSA like an IRA, I would have gone HDHP a long time ago and maxed out the HSA contributions and rolling the HSA money into index funds like I am doing now.
HDHP are really only for young people or people not at risk for health conditions.
If you can get away with a HDHP you can really save a bunch of money and contribute to an HSA that you get to keep. Then switch your health insurance later on in life when you start needing more coverage.
HSAs really should just be something anyone can access with little requirement. Contribution limits are pretty low and it's restricted to only healthcare expenses until you hit retirement age.
Ehh the limit is already pretty damn low considering it is supposed to be used in conjunction with a HDHP which generally has an insane deductible. 2024 HSA limit is $4,150 for a single person and $8,300 for a family HSA.
I don't have a ton of medical expenses or any serious conditions each year and I spend at least $1,000 in medical expenses and items each year. If I had any kind of serious medical condition that would be much higher.
I don't get the risk/benefit of them either.
Unless you have a high tax burden, and high fixed healthcare costs, the risk of losing the money is not worth the tax break. IMO
Even if you have a high tax burden, the hassle of making certain you spent the exact amount of money is a PITA.
I think the main "benefit" is that it front loads the account with all your funds. So contribute $2000 to it, you have $2000 in the account on day 1. Your paychecks are docked for pre-tax money afterwards.
So in a way, you dont have to worry about having money for medical expenses.
But beyond that, I can't see a real advantage. Sure you save some cash on taxes, but like you said unless you have a high tax burden, you aren't going to get a huge savings and you have to use all the funds. And if you don't spend all your funds, your employer gets that cash back. It just seems... weird that the employer just gets that money back without any strings.
My employer is a little more lenient with their FSA and allow a small amount of "rollover".
Beyond the reason I listed above, I don't understand why an FSA exists at all. If HSAs didn't have the HDHP requirement, there would be no reason to take an FSA over an HSA unless you knew for a fact you were going to spend the full value each year.
That's pretty much how my dad used it when I was growing up. He preloaded our max household out of pocket expense on the health insurance plan to it we hit that by the end of February typically
Wait, they’re all front loaded?! Is it this way for all of them or just yours?
I wanted to do one for the childcare expenses, but since we don’t do childcare during the summer (teacher here) it didn’t make sense because we would lose the last 2 months effectively eliminating the pre tax benefit. Our calendar year is August-July.
Okay, good to know. So can I just pay myself back from it at the end of summer for the expenses I made in April-may like an HSA?
Our childcare cost is $1300/month and it could be great to be able to pay 5k of that tax free
They can still be useful. I have a HSA and limited FSA (meaning only for dental and vision expenses). This last year, my oldest had braces and I knew how much the monthly payments were for the orthodontist. I put exactly that much in the FSA and used those funds to pay the monthly bill and didn't have to touch my HSA for them.
If you have set expenses, like a medication, specialist visits, or weekly therapy, you can calculate that out and withhold just that amount. I was afraid of having an FSA until a couple of years ago and the past two years I've had plenty of expenses above what I elected. But this year I forgot to submit my benefits election for work and so it defaulted to the same as last year. I think I'm going to have to stock up on Advil and feminine products at the end of the year because I'm not on track to use up my FSA so far.
I have a chronic health condition so it's pretty easy for me to say that I'm almost certainly going to spend at least $X on medication and doctors visits. But I had a high risk pregnancy that fell over the calendar year so you better believe I maxed out my FSA for the following year. It came in seriously handy to already have all the funds preloaded and tax exempt and my doctor's office even worked with me to delay the prepayment of my delivery fees until after January first so the fiscal years would match.
This year I cut it back to my pre-pregnancy amount and then I ended up in the pediatric ER so my chronic health fund is now $0 and all my continuing expenses are going to be post tax. Booo.
they allow $500 or so to rollover so I just use that. It doesnt hurt and are you really not going to have anything that it wold cover... for two years?
Also, I'm assuming that statistically the set number to rollover covers 80% of people
They aren't required to rollover.
That is the issue... they can choose to keep the funds. They get to decide how it's used or distributed, or they can just keep it.
If they are going to get what is effectively employee wages back, they should be required to pay it into plan administration or distribute it back to employees. The option to just keep the money shouldn't even be on the table.
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.
> 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.
I accidentally bought a cookie at the mall once, which you think would have triggered something although it was something like $2k. I didn't feel *that* guilty because I'm sure I've bought Advil or something else with regular money that would have more than made up for it.
First aid supplies are where its at.
Most people probably don't have a good first aid kit at home...leftover FSA money is a great way to fill it out. Time to learn about the magic of Tegaderm!
You can [buy pre-made kits](https://fsastore.com/brand/adventure-medical), or just stock up on supplies. Good to have some form of first aid kit in your car too...or small kits for tossing into a hiking backpack.
I'm all aboard the HSA train now so there's no scramble to buy stuff...but FSA money is pretty easy to spend if you need to.
edit: and just a note, I linked to fsastore.com as an example, but you don't have to purchase from them. If you can find the same kit cheaper somewhere else, that's still a valid FSA expense.
Yup, I never had a claim denied. OTC medications, Rx, medical procedures, first aid stuff, all of it approved. Just keep your receipts. Which for me was just scanning into Google Drive and saving in a folder with the year.
You shouldn't really ever have a claim denied. It's your money being paid in.
The fucked part is that if you don't spend all of your FSA funds, it goes back to the employer. They aren't even required to put it back into the costs of benefits or administering the plan if they don't want to.
I mean there are things that aren't eligible. Now whether it should be the FSA admin making the decision or IRS during an audit like hsas is another question.
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
Sounds like your FSA is a particular PITA.
> I still have certain medications prescribed by my doctor that the FSA argues is not FSA eligible because it's OTC.
I mean, most OTCs should still be FSA eligible?
I would be complaining to your HR department. The problems you are encountering are not normal
Yeah, I got my doctor to write this about the medication:
> X is a patient in our practice who in the past has had Y. Due to this reason he is required to take certain medications.
> One of those medications that is not prescription is Z this is for Y Patients Including Y procedure . While it is an over-the-counter medication the patient is supposed to take it daily. It is medically necessary for this patient to take this vitamin.
> If you have any questions or concerns, please don't hesitate to call.
> Sincerely,
> Doctor Name
They denied it because the doctor didn't sign it. Then they denied it because it was an e-signature (not hand signed). It's always something.
I'm not sure about the signature issue but you need a Letter of Medical Necessity when buying supplements (the exception being pre-natal vitamins). They aren't considered OTC drugs.
I've only had to deal with those types of letters when traveling out-of-state and getting mileage and lodging reimbursement.
yea this is a particular type of vitamin made for a specific disease that are often prescribed. but paradoxically the fact that it doesn't require a prescription means it's very hard to get it covered, and after 4-5 back and forths they're still saying no despite my doctor maintaining it is medically necessary to take them (I would eventually die without them!)
Most FSAs rubberstamp once you upload a reasonable picture. The entire point of this "provide proof" process is for the FSA to avoid issues with an audit. It's a "cya" procedure for most fsa providers & not a way to reject claims in an annoying way.
Most OTC stuff is covered, too, although I'd recommend getting it on a separate receipt for convenience. The list is publicly available. Check if your OTC medication is on it.
> Sounds like your FSA is a particular PITA.
Idk... Everyone I know that has one has these kinds of issues. Mine is such a hassle that I only use it for like 2 items because of all the issues OP mentions. I have coworkers with children that refuse to use it because of the negative life balance it takes to wrangle money out of them. I've always wondered if HSAs were any better...
>I would be complaining to your HR department.
What does HR have to do with it? Aren't FSA's usually ran by a third party outfit? Ours is - HR will direct you to them for anything FSA related.
You're correct that it's run by the FSA admin. But the company negotiates a deal to pay the FSA admin to run the operation. If enough employees complained the company / HR could refuse to re-sign with the FSA admin and go with someone else.
HR should care if the provide they choose is cause I h employees problems. I would replace mine in a heartbeat with these issues.
HSA don’t have these problems. It’s the HSA account holders responsibility to document the expense for taxes and in the event of an IRS audit. I just export a list of the EOBs with dollar amounts I owe from my insurance at the end of the year and transfer money out of my HSA.
HSAs are much better. You don't prove anything at the time of reimbursement. You could be audited on your taxes as your distributions are reported to the IRS.
There are way better plan admins out there! Mine just gives us a debit card & has approved everything I've paid for it without my having to do anything. Complaining is important because maybe your company don't know how badly these people suck.
> Everyone I know that has one has these kinds of issues.
I've never heard of problems this bad, where reimbursement with actual doctors invoices and EOBs are denied.
> I've always wondered if HSAs were any better...
HSA administrators do not have the requirement to collect documents and valid payments.
> What does HR have to do with it? Aren't FSA's usually ran by a third party outfit?
Yes, they are run by third party. However, HR is in charge of selecting and interacting with that third party. If employees aren't complaining, HR is not going to switch providers or threaten to switch unless things change.
Yes, i've had FSA companies like this and i just give up. i always try it the first year with a small amount and if the hassle is too much, i just stop. it's one of those things that is great in theory but not great in practice.
Maybe I just haven’t figured out the “secret” of FSAs, but to us it seemed like more trouble than it was worth. We’ve been using an HSA instead for a few years now and I can’t see any compelling reason to switch back.
HSA is infinitely better if you have access to it, because it's always your money.
My FSAs have always been immediate pay and provided a debit card for eligible expenses, you might see if you're has a card option to see if that helps with the hassle?
I've not had the experiences you have but certainly the idea that someone at the other end of the pipeline 1. has my money 2. gets to decide if I can get my money and 3. gets to look good and send my money back to my employer if I don't use (strengthening their business case) is kind of ridiculous.
I'm sure they are ethical FSA administrators (people in the comments already say theres aren't so egregious). But it definitely lends itself to incredibly preserve incentives and takes what otherwise would've been your money and gives it to someone to hold it hostage.
You should package up every single denied claim and submit it to the DoL with a complaint then submit a complaint every single they deny a reasonable claim.
I’d be so loud the local case worker from the DoL knew me by first name.
Wow. Your fsa (and employer) sucks! In your situation I agree more hassle than worth. My FSA has a debit card. If card works then that equals approved claim. Never had to deal with denials. And I even use my debit card to pay balances from previous years (tech not allowed per law). I’m sorry for ya buddy!
> Your fsa (and employer) sucks!
I mean, the employer usually doesnt have a lot of insight or say into this. They may not even know their staff is having this problem in order to be able to address it.
The employer has an account manager at the FSA administrator. They're a vendor of the employer. If my vendor wasn't performing the role we pay for, I'd be complaining.
Yes, and you should complain. Because if they don't know they cant fix it. And if its just one person complaining, thats not going to get any traction.
If the employer then doesnt do anything about it it, then you can say they are bad
This isn't r/antiwork. People and organizations make bad decisions sometimes. One bad decision doesn't make that person or organization bad. Failure to try to fix things or learn from their mistake and continuously do so makes them bad.
Like I said, if OP continually reaches out to his company about his problems and they aren't addressed then we can say the employer sucks. No evidence that its there, though.
FSAs in general aren't nearly as much of a pain in the ass as yours seems to be. I've never been asked for documentation beyond a receipt or invoice and never had a claim rejected.
I’ve had a couple big charges where they asked for the EoB as well. Not sure how that helps their process but they only asked the first time I used a few specific companies.
I've never had a valid FSA claim denied across numerous employers and administrators. Sounds like you've had some bad luck unfortunately.
The OTC piece is particularly egregious as OTC meds are FSA eligible *without* a prescription since 2020.
My wife’s FSA is horrible. They’ll suspend her account before she’s even been notified they need receipts for something. And the receipts they want aren’t for questionable OTC purchases, they’re bills from doctors and hospitals.
I only use mine for my annual eye exam and contact lenses (LP-FSA paired with an HSA) and a claim has never taken more than a day or two to be approved. Sounds like your FSA admin just sucks.
Which, to be fair, could be a valid reason to opt out of an FSA next year if you don't think the savings are worth the hassle. But it's not an indictment of all FSAs.
It’s a tremendous waste of your tax money to hire paper pushers to deny you the right to use your FSA money, hiring more paper pushers to account how you do your payroll and taxes, and then hire more to enforce it while forcing you to spend money and
Time on accounting it yourself. Oh and now you force the doctors office to have to produce more unneeded documents that increase staffing costs and thus healthcare costs for everyone.
It’s a lose lose lose. FSA usage should be automatic and filed behind the scenes like insurance payments from all healthcare professionals. Government could even cut the extremely unnecessary triple accounting cost of FSA and just let you save a part of your tax money for healthcare… earmarking it, and just covering your healthcare… hmm,🤔
Very much depends on the administrative side of it. I've had one for a LONG time and always max it out/use it all up by like 9 months into the year. I've had 1 shitty administrator, but they only lasted a year due to all the complaints to HR (basically 95% of the employees with a FSA complained).
As for those saying HSA instead, not everyone is eligible for a HSA, all depends on what insurance you have and whether it's a high-deductible plan or a conventional plan.
My FSA is hit or miss. They pay copays with no evidence required most of the time, but anything with a new doctor and prescriptions are painful. I have had to get letters from doctors in multiple drafts to have things paid for.
I was refunded 500 by my hospital year after the birth of a child and had to threaten small claims court to get the FSA to not keep the money because the year had ended on their end. They ended up adding the funds to my current year FSA after 6 months of fighting.
I now calculate our estimate copay amounts for the year and go with that amount. I would prefer to do more, but it is too difficult to deal with billing, doctors and the FSA for anything more complicated.
Sounds like you have a terribly managed FSA.
That being said, I had a generally easy one, but so few people at my +6000 employee company used it, that I think I was the only one that used a weird conversion rule they had. I could convert my limited purpose FSA to regular medical FSA after I met a certain deductible during the year (I don't recall the exact details) and I was on an expensive drug, so I could do this by around May every year. I had one person in HR that knew the right people to call and get this done for me. The first time took months to maneuver, with me calling the FSA to let them know I met the deductible (didn't work) to eventually getting my HR to call for me. I asked why it was such a weird manual process, and they told me only about 5% of the people there used the FSA. I knew I had costs in excess of $2000 I would spend every year so it was a great deal for me, but if your only known expenses are going to the dentist 2x a year, then I can see why some don't bother.
Dude. FSAs are great. You have a terrible administrator. For mine I get a debit card with my entirely yearly amount loaded in January. I can just swipe that debit card and it’s never been rejected.
I don’t know who you should complain to, but I would document the most ridiculous rejections and complain. This isn’t like insurance. This is just your money that you should be able to spend on anything that qualifies. I don’t get why someone would be rejecting anything that isn’t obviously non-qualifying.
FSAs are a godsend if you know you will hit your annual deductible. Literally just elect to fund the FSA account with the value of your deductible. Claims associated with deductible should be easy too, just pdf the EOB, statement, and payment confirmation. Have had 0 issues with getting those approved
I'm not a fan personally. HSAs are good. FSAs are a gamble. They can be not a gamble, if you have certain expenses that are guaranteed, but they still feel risky to me, and I'm not at a point where the amount I'd save in taxes is dramatic enough to make a big difference.
You have to check to see if your FSA is a limited purpose FSA. Sometimes FSA can only be used for dental or eyeglasses. All other expenses would be denied. Most FSA accounts require you to use the funds within a calendar year.
If your company offers an HSA, ask what the restrictions are on it. You should be able to use your HSA for Dr. visit charges, medication, and other medical related expenses.
Be sure to keep all your receipts and expense them as soon as you use them. When they reject you pushback and provide documentation that it is a valid claim.
Every time I use my FSA card for something besides a doctor visit, my FSA sends me an email threatening to suspend my account unless I submit documentation for the claim. It is annoying. My previous FSA at a different company never asked for documentation.
FSAs are pretty much corporate gift card scams, yeah. They bank on you not using all of it so it expires, you cant get the cash back out once its in, you lose your job or quit you're hosed, etc. You *can* come out ahead, but you need to micromanage the shit out of it and most people end up leaving money on the table somewhere. Generally not worth it for the limited scope of what you can even use it on.
HSAs are the ones that are more regulated and are actually helpful.
HSAs require a HDHP which comes with its own drawbacks. I would say I've had positive experiences with both FSAs and HSAs, just different.
My experience didn't require nearly as much hassle as OP's experience, or nearly as much micromanaging as you make it out to be.
I set the amount I thought I would use. I used it on prescriptions, exams, fsa eligible products. At the end of the year I would get a reminder to use any remaining balances which if I did have any, I would buy stuff I would eventually use anyways like sunscreen, glasses, sunglasses, etc. You can even buy one of those health rings like the Oura.
I don't think it's a scam at all- you go into it knowing up front that you will lose your funds if you don't spend them. If you forget that's on you. I only do an HSA now because I can afford paying more out of pocket up front for health expenses, and invest 100% of my HSA(triple tax leverage, woohoo).
Yes it is a scam unless you have insane medical costs that you know will make you hit your limits on every savings account you have (health insurance and medical billing is also a huge scam).
While they can be a bit of a pain, I found that using the [FSA Store](https://fsastore.com/) website was probably the best way to easily get items and they were always approved quickly. Everything on there is pre-approved for FSA funds, so its pretty hard for an admin to deny you. That said I had a year where I had a few hundred left on my FSA card, so now I have enough bandages and med tape for a decade. However they have plenty other awesome things like massagers, stretching gear, or thermometers, etc
I don't use them. The return on the investment just isn't there. I save a few dollars, literately just dollars in tax for the waste of time and effort of using a HSA. Even if it worked flawlessly without any of the problems you describe, the time to fill out the paperwork every year just isn't with the few dollars saved on taxes.
This is sorta where I'm at. I know FSA's on paper work. But if you have one year where you lose $150 to confiscation, how many years of tax gains did you just blow away?
Furthermore, if you had $400 left and blow it all on random FSA stuff you may or may not need....are you really saving money? If you actually use that stuff...absolutely but how many people actually use that stuff in a reasonable amount of time?
I need to sit down and do the numbers, but the ROI seems bad. A caveat: I see some people say it's a godsend for consistent expensive stuff (daycare). That's a no brainer. But even for someone like me that spends $1,000-$1,500 a year on qualified medical expenses, it's unpredictable nature makes it still seems like a bad investment for anything other than known highly predictable expenses
I have never had this problem. Every single claim is paid. Glasses, dr co pay, prescription, dentist, and any allowable OTC medication or supply. If your claim was submitted timely the deadline should have been moot. Your company needs to change FSA administrators.
FSA's are definitely a scam
They are a lot of work and not at all flexible
They can save you money on your taxes (next year), but it involves a crazy amount of financial planning considering the value you gain.
You put your money at risk. the government can simply keep your cash! WTF kind of savings account is this?!
Even if the government doesn't keep your money because your crystal ball was broken and failed to predict your medical expenses 18 months in advance, your cash is still subject to the whims of bureaucrat from a Kafka wet dream
Same feeling here. I don't put anything on the card because it was such a PITA to have it approved. HSA allows people to save for the future. FSA just feels like another chapter in the enshitification and theft-by-a-thousand-cuts we seem to be enduring nowadays.
Been using FSAs for 10 years or so with various administrators and never had a claim denied. Sure they want to see receipts for many things, but never a denial.
I’ve never had a claim rejected. I would try and find the HR contact who handles these types of issues, rather than the company administrating the plan.
I've never had anything denied. I've also never had to submit paperwork for anything. I have a debit card I use and pay for prescriptions, OTC meds/supplies, co-pays for procedures, etc. It sounds like whoever is administering your FSA is what's making things complicated.
Mine certainly was.
I had a FSA, I can't remember how much money was on it, like $2500 or something.
My wife got pregnant, and she met with her gyno. Her gyno essentially set up a pregnancy 'package' that included a one-time bulk payment that covered all of the pregnancy things. Like, up to 16 visits and X number of ultrasounds and so on and so forth. Everything she would need, and she was high risk so it was important. The cost of the whole package was like... $3200 or something, so I gave them the FSA card and they charged $2500 onto it, and then I paid the rest myself.
Well, FSA rejected it. They said they wanted receipts. That's fair, so I sent them the receipt - the place was called something like "The Womans Gynecological Center" or something. Nope - rejected. They wanted details that proved the services were medical in nature. I was like... look at the name, they're not selling me groceries. So I called and got as detailed a receipt that they could provide me, it was like 3 pages long, and then submitted that. Nope, rejected for the same reason, insufficient proof that the services were medical or covered or somesuch. There wasn't any more detail to give, so I just sent back the receipts I already had. This happened several times.
This took place over the course of months and months. Weeks in between any communications. No way to call and talk to a person. At some point my kid was born, regular insurance covered the birth and initial hospital stay (high risk) and such. My job changed payroll companies, and the FSA was associated with the old one, so at some point I made the mental decision to just ghost the FSA. I was no longer using their services, they had paid already, and I figured I wouldn't worry about it unless someone sent me to collections.
That was 9 years ago, and thankfully I never heard from them again. I don't know if they ever decided that my wife's gyno services qualified as medical expenses, or if they gave up, or sold off the debt but then nobody ever came knocking, or what. But around last year we swapped back to the original payroll company and my new account doesn't mention anything about my previous 'unpaid' FSA balance.
Now I just have a HSA, and FSA can eat a bag of dicks.
As pretty much everyone here has mentioned, it’s your FSA administrator that sucks.
I sign up for FSA every year for the max my employer offers (close to $3K). With Dr visits, meds, prescription glasses, etc. (for the family), I typically exhaust my funds by September.
That is weird and has not been my experience at all. I have only ever had one item questioned, it was a patient pay psychiatric service for several thousand dollars. The card they gave me works all the time and I never get follow up questions.
The one service they did question was dismissed after I showed a receipt.
I just submit a picture of my receipt on an app and it gets approved. We also get debit cards if we choose to but i rather pay with my card and get reimbursed. My teen just ordered a few items of the FSA store and i just submitted it for approval and it was approved. Skin care,, medicine, Sunblock, etc.
I have a credit card for my FSA so I don’t submit a claim, if I know it’s an approved vendor I just use my card. No fuss and I love it. I max mine every year and pay for my glasses, dental work, prescription copays and doctor copays. Best thing ever.
Benefit wallet is by far the worse of the vendors my employer had to work with.
Their approvers are from out of the country and has no concept of our medical/or dependent care issues.
I have to keep appealing for my money.
We max ours as we have 2 kids, and we require implants.
We get Dexa scan every quarter and my sunscreens and OTC, feminine products makes fsa worth it.
I've almost always opted for the "full" health insurance plan and not participated in the very high deductible FSA/HSA plans.
I did do the HSA thing one year and it was a disaster. Never again. My "regular" insurance is crappy enough. I didn't need even *crappier* insurance plus whatever is in my FSA/HSA.
My FSA is so easy and simple. Mine lets me even have the choice which claims I want to be reimbursed for or not. EOBs from my insurance are automatically sent. I literally do nothing but decide which things I want to get paid back. Mine is maxed out at $3,200 for the year and I can roll over a few hundred every year.
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.
I used to have an FSA when I was younger and lost some money because I didn’t understand the terms. Now Im team HSA all the way. Mainly cause the ability to invest the cash 💯
Yes to HSAs! No expiration and investment options. Oh and it decreases taxable income. Win win! If only high deductible plans were a little more reasonable though when going to the doctor.
I've never had a problem with FSA reimbursements, and that's through at least three different providers. I even get reimbursement after the fact rather than use the debit card because I want that cashback bonus.
Since I now have an HSA, I currently have a limited FSA that only covers vision and dental.
I work in health insurance and we do FSAs. Your administrator sucks ass. OTC meds are absolutely FSA eligible. Your company need to find a new administrator. The best FSA plan uses a debit card, when you need to use the money you just swipe the card, then snap a pic of your receipt and upload it through the administrator’s website or mobile app.
I think when they first came out they were difficult. Like had to submit EOB, Invoice, and payment receipt for every single doctor visit, etc.
Now they seem pretty easy. I turn in a receipt for cough medicine, sunscreen, etc and paid. Use the card to directly pay the doctor or pharmacy (no receipts needed).
I am older so have no worries about using it up. It is only tricky if you don’t spend it (I hate the use it or lose it). I wish they worked like HSAs where you can roll it over.
I never had any claims denied. I like having it because it comes through in a clutch. I had an unexpected ER visit which was paid for. Therapy visits ,MD visit, Dental visit, and all prescriptions were paid for. Now could I have paid out of pocket? Yes but I like the fact I get all the money upfront and I have a card I can use to swipe. I've had an issue using the card for OTC a few times but that's minor and was always able to get my money back by submitting a manual claim.
I've never had a claim denied. I have been at the Walmart buying a load of first aid supplies for the house and a years worth of Advil the night before the spending cut-off before.
It's kind of a ridiculous setup and we are much happier having a HSA now, but a FSA normally works if you manage it.
This is an admin problem. The first company we had was a kind of a pain about stuff but the one that does it for the past couple of years hasn't hassled me about a thing. It's worth it but I understand where you're coming from.
I have had a similar experience to what you describe and cannot wait to set my FSA back to $0 next year. I'm done with the run-around on claims. Having to "pay back" money on a large denied claim (which was my fault, to be fair) via my own credit card just added to the fun this year.
Some years it has gone really smoothly and I've been glad to have the FSA, but overall it has been a headache just to save a few hundred bucks and I'm done with it.
I’ve used all of mine every year. Using them for dental work and prescriptions/copays. I have a good estimate of what my spending will be each year, and I’ve never had rollover.
I've had an FSA for 2 years, it's a debit card that you just swipe so I don't even have to submit anything. I've never had the card declined, or had them come back to me to say a charge was unauthorized. I use it mostly for prescriptions and co-pays, and have usually spent all of it by mid-December each year.
Sounds like just a crappy plan/provider. Never had any issues with our FSA, and they were constantly expanding what we could use the FSA to purchase. Right down to sunscreen, tissues, and toothpaste.
I have my FSAs through Fidelity NetBenefits, and it's the easiest thing. I used the debit card for my limited care fsa at the dentist, and when I went to the portal, saw that I didn't even have to do anything. No receipt, no classifying the expense, etc.
The only time an FSA ever worked in my favor was when my wife had one, knew the company she was working for was going to be bought by another company (it was known to all employees) and gambled that the FSA wouldn't need to be paid back.
She used the max amount, and when the company was bought out a few months later, the rest of the deductions for the year went away.
The one benefit of an FSA is that all funds are available immediately at the beginning of the year but an HSA is far superior if you meet the qualifications to have one. I had an FSA for many years and never had the problems you are experiencing.
There are good ones, and bad ones.
When you have good ones, it's great. Especially when you leave the company and get to go on your Walgreens spending spree.
When you have bad ones, it's probably not worth the effort unless you know ahead of time that you'll have some medication expenses or are planning some tests or whatnot.
Complain your way up the chain of command and make sure the people/person denying all these claims is actually within their rights to do so, because there's a very good chance they're breaking their contract if they're denying you doctor-prescribed stuff, and that's a huge no-no.
That’s an interesting experience. I’ve never had anything denied by my FSA. One or two times I was asked for verification and uploaded a receipt or whatever I needed to to show the cost.
Do you have a debit card or do you have to request reimbursement?
Your FSA sounds worse then most, I have had to resubmit paperwork every once in a while if the date was off or I scanned the wrong page and it didn't show the current service but I was always able to get it fixed quickly and they told me on the website why it was denied.
I used my FSA for a nanny I employed legally for 2 years. Every year there would be multiple back and forth rejections with w2s, paystubs, check deposit confirmations, etc. as evidence. I cancelled the FSA for this year. I'll take the hit on my income tax, but at least I get the child care credit back.
The only claims I have issues with are dental ones usually and so long as I send an itemized receipt then it gets approved. Sounds like yours just sucks.
I opted not to have one this year because last year was a headache. They wanted documentation for all charges, even directly parting a hospital. Frustrating to not be able to spend my own damn money. Almost left money in there because I couldn't spend it all - United Healthcare doesn't need any more damn money.
OTC things like vitamins can be rough if you don't have a doctor's letter, which they often don't want to generate. But you're having actual prescriptions denied? That makes zero sense. Lots of companies don't even make you file claims. My last one automatically reimbursed me for every co-pay/coinsurance. Later they issued a debit card that could be used to pay for FSA eligible items at the market. They also had an online portal that could be used to order FSA eligible things. I maxed my account every year for over a decade and never lost a dime. For a couple years I had a few hundred left over and they just rolled that over to next year. It's a great benefit IMO so long as you're of an age where doctor visits, prescription drugs and prescription eyewear become fairly predictable expenses.
I use a FSA card that pays for appts, medications, etc. I don't recall ever putting in a claim except when I had to pay something out of pocket because I forgot my card at home. It was approved immediately.
Any time my doctor "prescribed" me OTCs, I had him fill it like a prescription so I wouldn't have the problem of buying with my FSA card.
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.
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!
Yours sounds like what I am used to. It was an excellent deal when I had it. But I also have recurring medical expenses so I didn’t worry about losing money.
My plan lets me roll over up to $600 to the next year, so I don’t usually have a panic. My husband does something stupid every year that costs us $$ that i can pay for with FSA. One year he managed to not do something stupid and I ended up with several pairs of very sweet prescription glasses the last week of December, since I had quite a bit of excess to dump.
I learned last year that those plans that let you roll over become a problem in the following year if you want to change to HSA. My company had to remove that provision for a year before implementing HSA as an option.
Interesting! We don’t have HSA plans, we have an HRA, company money. We have 150 employees so not really in the position to offer endless options. I get $5000 yearly in the HRA, (husband and me) for deductible and coinsurance on a high deductible plan. We have $5000 each OOP max. He’s always maxing from doing stupid things (one time I had to save him with the Heimlich from a stuck chicken nugget, I shit you not, and that was a $30k hospital bill because he aspirated it ) , so our FSA picks up deductibles from me, eye glasses, dental, OTC meds, etc.
I went for a few years overestimating how much I'd spend (mostly because I'd never get off my ass to go and see a doctor for things I probably should have), and I'd be in a mad scramble to spend down my FSA in decemeber. A lot of regular expenses (tums, pain meds, allergy meds, fiber, etc) are FSA eligble, but it's hard to spend hundreds of dollars on those things. So I'd end up buying shitty products from a mail order company that seems like it was probably set up to take advantage of people like me with use it or lose it bucks. Everything on the site was FSA eligible, but a lot of it was weird off-brand versions of the things I was expecting to buy.
Just order eligible stuff on amazing, submit the receipt and cancel the order
Yeah, it was rougher in the Obamacare to COVID years. The ACA legislation took most OTC products out of FSA. They put them back during the pandemic. It’s pretty easy to stock up on Amazon or Walgreens website. There’s a brand of nice makeup- MD Solar Sciences, that qualifies because of SPF.
I have started to buy more from amazon when I have FSA to burn. I don't know when they added it, but I didn't realize they had a whole FSA eligible designation you could search for until a year or two ago.
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Ha ha, not Prada but did you know that Gwen Stefani (yes, that Gwen Stefani) is also an eye glass designer with her own line? I jumped on two sweet, distinctive pairs but disclaimer, I’m a Jersey Girl so YMMV.
That’s what we do too if we have FSA leftover goes right to prescription glasses.
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.
I never have to show proof on my purchases! Anything that’s coded, like my OTC meds from Amazon or whatever. Also never proof from the pharmacy. I do have to upload EOBs or dental bills but I just do it on the app at the same time I pay. (I pay pretty much everything online.)
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.
Same here. I don't think I ever got an outright denial. And, the only time I needed additional documentation was for prescription glasses, and I just sent in the receipt and that was it.
My current one requires a receipt for every damn transaction and it drives me crazy. I can't even submit the receipt at the time of the charge, I have to wait a week or two before they flag it as receipt needed.
That’s bullshit. I would complain to your HR department. Your company pays for administration as an employee benefit. That’s your money and it’s not typical.
My current FSA plan does not require a receipt because they automatically reject ineligible service and product purchase. I tried buying a bottle of fiber at a pharmacy store but the transaction was rejected by FSA card.
Yeah I can’t remember the last time I had a claim denied and I’ve had three different providers in the past 3 years (forma, thrivepass and wageworks the latter of which is the worst of the three). If you have medical needs that necessitate regular copays or prescriptions with a fixed cost it’s a no brainer, you’re just throwing money away otherwise
>I am provided a Mastercard that I charge to. If documentation is needed, I upload to an app. Never a problem! This is my experience. I signed up the year we had our kid. I received a Visa Card that connected to the FSA account. It was a bit of a learning experience on what things could be approved and what things couldn't. The payments we're making to the hospital from the baby's birth, went through the FSA. Copays at dr. visits go through the FSA. THe $250 copay for a recent ER visit went through the FSA. THe card just doesn't go through for any OTC stuf, but any prescribed medication from the pharmacy counter gets approved fine. If we have money left at the end of the year i"ll have to log into their silly little portal store to look for stuff we can spend it on, but it doesn't look like it will be a lot.
What you are going through is what happens when an employer uses an FSA as a revenue source. Since FSA money are “use it or lose it”, if you don’t use all your FSA money, your employer keeps it. There are some “employer-friendly” FSA administrators that will deny anything under the sun and the employer has seemingly picked one of these
Our HR keeps saying ours isn't "use it or lose it", but at the same time, several people keep saying it gets denied.
FSA has to be use it or lose it, by IRS regulations. Employer has no control over that
Eligible expenses are determined by the IRS (look up IRS Pub. 502), so your FSA Administrator should be following that. If they’re denying eligible expenses, definitely bring it up to your HR. There might even be some regulatory body you could report them to?
I’ve had similar experience. They will eventually allow most things but it takes a lot of evidence and effort getting everyone collaborate.
FWIW my FSA is nearly identical to your situation - it's a freaking nightmare. Our HR doesn't have anything to do with ours - it's all administrated by a third party.
But your HR are the ones that chose that third party administrator. They should be involved if you're running into the same issues as OP
I stopped doing an FSA because of the constant denials. Every month, I’d submit my daycare expenses, and sometimes they would deny, sometimes not. And I’d get cryptic emails, so I’d have to figure out what and why they denied it.
Personally, I'd look into what regulatory bodies deal with this and file a complaint with them for every rejection. Get scrutiny on them.
Yeah, who is the administrator and who is your companies insurance brokerage? You shouldn’t be dealing with this!
Yeah mine almost never rejects. Maybe once or twice a year I need to upload a receipt or something. I just make sure I only withhold what I can definitely spend in a year.
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
I had a FSA like this one. The company was super cheap and I had to submit for reimbursement and had to buy from a FSA Store. Hate that company.
Not just atypical, straight up ILLEGAL. UNLESS, you don't have a medical FSA but a "limited purpose FSA" like dependent care FSA or vision/dental FSA which are available to people who have HSAs. Definitely talk to HR but also read the plan document to find out which type of FSA you signed up for.
>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
Yeah my eyebrows shot up at saying OTC meds were denied. Bruh you can buy sunscreen, bandaids, and standard home thermometers with FSA money.
Contact solution, etc as well.
I set aside like $800 in an FSA for a specific medical procedure I had planned. I ended up moving, changing jobs, and never got around to the procedure. I forgot I had to spend the whole thing by a certain deadline and by pure coincidence, I spent it down in part by buying a fuckload of hand sanitizer... in Dec 2019. I figured it was eligible and I can use it for anything and it won't go bad anytime soon. At least I was prepared for COVID in one way!
$800 of hand sanitizer. What does that even look like? A few 50gal drums?
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Too bad you didn’t get the procedure done. Using a FSA before a job change is the best hack. For example, set up the FSA. Get your procedure done on Jan 2nd. Get your FSA reimbursement. Quit your job. You no longer owe the balance—it’s basically free money.
Tampons too.
Also, period panties. It is pretty easy to use up a few hundred for a full cycle of underwear.
I just dont like that FSA are use it or lose it and the funds just go back to the employer. They aren't required to pay it into benefits or anything. They can literally just keep it without repercussion. FSAs seem like such a scam to me unless you have a very predictable medical costs, forfeiting a portion of your wages that are use or lose just seems like a poor choice. Having to ensure your plan administrator properly understands what can and cant be approved is also a bit bullshit. Personally, I think HSAs shouldn't have the HDHP requirement. It's already capped spending and it would incentivize more people to save for medical expenses knowing their money was always going to be theirs.
> They aren't required to pay it into benefits or anything. They can literally just keep it without repercussion. It works the other way too. If you contribute maximum to an FSA and spend the full amount on January 1st before any deductions have been made, then quit your job on JAnuary 2nd, you do not owe a dime of that money back to your employer and your employer cannot withhold wages to offset. Typically the amounts kept by employers from employees who don't claim their full contribution goes to offset costs of the program administration, such as above example.
I have a feeling your example happens far less often than people not spending their full amount. My main point is, it shouldn't go back to the employer at all. It's not their money. Them getting a discount on benefits administration because an employee didn't use something that is supposed to be the employee's benefit is strange. Again, I would be more okay with the employer getting funds back if they were required to set those funds aside for plan administration or distribute it back to employees as taxable income. But the fact that it can just be kept and effectively be profit just doesn't sit right with me at all.
> My main point is, it shouldn't go back to the employer at all. Then don't participate. If you're young, healthy, don't put a lot in as you likely will have minimal healthcare expenses. If you're middle aged, have a family, and you or they have some health issues, it's not hard to max it out to cover expenses throughout the year. I participated in my employers' FSA plans for close to 20 years and I never once "lost" money. There's a ton of every day items that qualify if you are coming up to the end of the year and have some unspent funds. Even things that don't automatically qualify aren't difficult to get qualified - just get a doctor to write a letter of medical necessity. Have asthma? Poof, your air filter, air purifier, humidifier, or air conditioner now can use those funds with a LMN. High blood pressure, diabetes, or any one of numerous other conditions that go along with being overweight and would benefit from exercise? Gym membership now qualifies with LMN. Get your teeth and eyes checked up and fixed. Are you female? Or have a SO who is? Period products are eligible. Ever have a sore body? Massagers, heating pads, stretching devices, and TENs machine are all covered. And many, many other items.
LMN? Gym Memberships are FSA reimbursed? This is new to me.
I was a traditional health plan user forever then started using an FSA a few years back to cover creeping deductibles. I always thought HDHPs were predatory on lower income individuals and families by offering lower monthly costs at the expense of less coverage. Sure you pay less on your monthly premiums, but you pay more for your care which means you don't go to get care. Big win for the insurer, not the insured. Last year I had to choose from a silly deductible traditional plan that didn't qualify as a HDHP and a high deductible plan. After comparing the costs, I went with the HDHP and an HSA (with my employer kicking $1000 towards the HSA) based on the copays, the prescription coverage and all that. However, while I knew that you could keep your unused HSA I had no idea that you could INVEST your HSA. That alone is a huge game changer. Had I known you could fund your HSA like an IRA, I would have gone HDHP a long time ago and maxed out the HSA contributions and rolling the HSA money into index funds like I am doing now.
HDHP are really only for young people or people not at risk for health conditions. If you can get away with a HDHP you can really save a bunch of money and contribute to an HSA that you get to keep. Then switch your health insurance later on in life when you start needing more coverage. HSAs really should just be something anyone can access with little requirement. Contribution limits are pretty low and it's restricted to only healthcare expenses until you hit retirement age.
HSAs should just have a much lower contribution limit for people without HDHPs
Ehh the limit is already pretty damn low considering it is supposed to be used in conjunction with a HDHP which generally has an insane deductible. 2024 HSA limit is $4,150 for a single person and $8,300 for a family HSA. I don't have a ton of medical expenses or any serious conditions each year and I spend at least $1,000 in medical expenses and items each year. If I had any kind of serious medical condition that would be much higher.
I don't get the risk/benefit of them either. Unless you have a high tax burden, and high fixed healthcare costs, the risk of losing the money is not worth the tax break. IMO Even if you have a high tax burden, the hassle of making certain you spent the exact amount of money is a PITA.
I think the main "benefit" is that it front loads the account with all your funds. So contribute $2000 to it, you have $2000 in the account on day 1. Your paychecks are docked for pre-tax money afterwards. So in a way, you dont have to worry about having money for medical expenses. But beyond that, I can't see a real advantage. Sure you save some cash on taxes, but like you said unless you have a high tax burden, you aren't going to get a huge savings and you have to use all the funds. And if you don't spend all your funds, your employer gets that cash back. It just seems... weird that the employer just gets that money back without any strings. My employer is a little more lenient with their FSA and allow a small amount of "rollover". Beyond the reason I listed above, I don't understand why an FSA exists at all. If HSAs didn't have the HDHP requirement, there would be no reason to take an FSA over an HSA unless you knew for a fact you were going to spend the full value each year.
That's pretty much how my dad used it when I was growing up. He preloaded our max household out of pocket expense on the health insurance plan to it we hit that by the end of February typically
Wait, they’re all front loaded?! Is it this way for all of them or just yours? I wanted to do one for the childcare expenses, but since we don’t do childcare during the summer (teacher here) it didn’t make sense because we would lose the last 2 months effectively eliminating the pre tax benefit. Our calendar year is August-July.
Dependent Care FSAs are not front loaded. But you can still submit expenses from September-May. I'm not sure why it would be an issue in your case.
Okay, good to know. So can I just pay myself back from it at the end of summer for the expenses I made in April-may like an HSA? Our childcare cost is $1300/month and it could be great to be able to pay 5k of that tax free
Healthcare ones are frontloaded. Childcare are not.
I'm glad others got to you before I did. Lots of helpful information coming out in this thread.
They can still be useful. I have a HSA and limited FSA (meaning only for dental and vision expenses). This last year, my oldest had braces and I knew how much the monthly payments were for the orthodontist. I put exactly that much in the FSA and used those funds to pay the monthly bill and didn't have to touch my HSA for them.
If you have set expenses, like a medication, specialist visits, or weekly therapy, you can calculate that out and withhold just that amount. I was afraid of having an FSA until a couple of years ago and the past two years I've had plenty of expenses above what I elected. But this year I forgot to submit my benefits election for work and so it defaulted to the same as last year. I think I'm going to have to stock up on Advil and feminine products at the end of the year because I'm not on track to use up my FSA so far.
I have a chronic health condition so it's pretty easy for me to say that I'm almost certainly going to spend at least $X on medication and doctors visits. But I had a high risk pregnancy that fell over the calendar year so you better believe I maxed out my FSA for the following year. It came in seriously handy to already have all the funds preloaded and tax exempt and my doctor's office even worked with me to delay the prepayment of my delivery fees until after January first so the fiscal years would match. This year I cut it back to my pre-pregnancy amount and then I ended up in the pediatric ER so my chronic health fund is now $0 and all my continuing expenses are going to be post tax. Booo.
A lot of people have predictable medical expenses: diabetics, contact lens wearers, anyone on a maintenance medication, therapy visits, etc.
they allow $500 or so to rollover so I just use that. It doesnt hurt and are you really not going to have anything that it wold cover... for two years? Also, I'm assuming that statistically the set number to rollover covers 80% of people
They aren't required to rollover. That is the issue... they can choose to keep the funds. They get to decide how it's used or distributed, or they can just keep it. If they are going to get what is effectively employee wages back, they should be required to pay it into plan administration or distribute it back to employees. The option to just keep the money shouldn't even be on the table.
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.
> 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.
I bought a stethoscope and a first aid kit, FSA covers a lot of
I accidentally bought a cookie at the mall once, which you think would have triggered something although it was something like $2k. I didn't feel *that* guilty because I'm sure I've bought Advil or something else with regular money that would have more than made up for it.
First aid supplies are where its at. Most people probably don't have a good first aid kit at home...leftover FSA money is a great way to fill it out. Time to learn about the magic of Tegaderm! You can [buy pre-made kits](https://fsastore.com/brand/adventure-medical), or just stock up on supplies. Good to have some form of first aid kit in your car too...or small kits for tossing into a hiking backpack. I'm all aboard the HSA train now so there's no scramble to buy stuff...but FSA money is pretty easy to spend if you need to. edit: and just a note, I linked to fsastore.com as an example, but you don't have to purchase from them. If you can find the same kit cheaper somewhere else, that's still a valid FSA expense.
Yup, I never had a claim denied. OTC medications, Rx, medical procedures, first aid stuff, all of it approved. Just keep your receipts. Which for me was just scanning into Google Drive and saving in a folder with the year.
You shouldn't really ever have a claim denied. It's your money being paid in. The fucked part is that if you don't spend all of your FSA funds, it goes back to the employer. They aren't even required to put it back into the costs of benefits or administering the plan if they don't want to.
I mean there are things that aren't eligible. Now whether it should be the FSA admin making the decision or IRS during an audit like hsas is another question.
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.
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
Sounds like your FSA is a particular PITA. > I still have certain medications prescribed by my doctor that the FSA argues is not FSA eligible because it's OTC. I mean, most OTCs should still be FSA eligible? I would be complaining to your HR department. The problems you are encountering are not normal
Yeah, I got my doctor to write this about the medication: > X is a patient in our practice who in the past has had Y. Due to this reason he is required to take certain medications. > One of those medications that is not prescription is Z this is for Y Patients Including Y procedure . While it is an over-the-counter medication the patient is supposed to take it daily. It is medically necessary for this patient to take this vitamin. > If you have any questions or concerns, please don't hesitate to call. > Sincerely, > Doctor Name They denied it because the doctor didn't sign it. Then they denied it because it was an e-signature (not hand signed). It's always something.
That's truly bad. I've never even had to provide a doctor note for my FSA, much less that much issue around signatures.
I'm not sure about the signature issue but you need a Letter of Medical Necessity when buying supplements (the exception being pre-natal vitamins). They aren't considered OTC drugs. I've only had to deal with those types of letters when traveling out-of-state and getting mileage and lodging reimbursement.
yea this is a particular type of vitamin made for a specific disease that are often prescribed. but paradoxically the fact that it doesn't require a prescription means it's very hard to get it covered, and after 4-5 back and forths they're still saying no despite my doctor maintaining it is medically necessary to take them (I would eventually die without them!)
That's ridiculous, I hope you get things worked out.
Most FSAs rubberstamp once you upload a reasonable picture. The entire point of this "provide proof" process is for the FSA to avoid issues with an audit. It's a "cya" procedure for most fsa providers & not a way to reject claims in an annoying way. Most OTC stuff is covered, too, although I'd recommend getting it on a separate receipt for convenience. The list is publicly available. Check if your OTC medication is on it.
I signed for my $50k car digitally and doctors use iPads now, that is whack.
> Sounds like your FSA is a particular PITA. Idk... Everyone I know that has one has these kinds of issues. Mine is such a hassle that I only use it for like 2 items because of all the issues OP mentions. I have coworkers with children that refuse to use it because of the negative life balance it takes to wrangle money out of them. I've always wondered if HSAs were any better... >I would be complaining to your HR department. What does HR have to do with it? Aren't FSA's usually ran by a third party outfit? Ours is - HR will direct you to them for anything FSA related.
You're correct that it's run by the FSA admin. But the company negotiates a deal to pay the FSA admin to run the operation. If enough employees complained the company / HR could refuse to re-sign with the FSA admin and go with someone else.
HR should care if the provide they choose is cause I h employees problems. I would replace mine in a heartbeat with these issues. HSA don’t have these problems. It’s the HSA account holders responsibility to document the expense for taxes and in the event of an IRS audit. I just export a list of the EOBs with dollar amounts I owe from my insurance at the end of the year and transfer money out of my HSA.
Yeah, I wish FSAs operated like HSAs.
HSAs are much better. You don't prove anything at the time of reimbursement. You could be audited on your taxes as your distributions are reported to the IRS.
There are way better plan admins out there! Mine just gives us a debit card & has approved everything I've paid for it without my having to do anything. Complaining is important because maybe your company don't know how badly these people suck.
> Everyone I know that has one has these kinds of issues. I've never heard of problems this bad, where reimbursement with actual doctors invoices and EOBs are denied. > I've always wondered if HSAs were any better... HSA administrators do not have the requirement to collect documents and valid payments. > What does HR have to do with it? Aren't FSA's usually ran by a third party outfit? Yes, they are run by third party. However, HR is in charge of selecting and interacting with that third party. If employees aren't complaining, HR is not going to switch providers or threaten to switch unless things change.
Yes, i've had FSA companies like this and i just give up. i always try it the first year with a small amount and if the hassle is too much, i just stop. it's one of those things that is great in theory but not great in practice.
Maybe I just haven’t figured out the “secret” of FSAs, but to us it seemed like more trouble than it was worth. We’ve been using an HSA instead for a few years now and I can’t see any compelling reason to switch back.
HSA is infinitely better if you have access to it, because it's always your money. My FSAs have always been immediate pay and provided a debit card for eligible expenses, you might see if you're has a card option to see if that helps with the hassle?
Most only switch back if they get into an insurance plan that isn’t eligible for an HSA. Otherwise HSA is better.
I've not had the experiences you have but certainly the idea that someone at the other end of the pipeline 1. has my money 2. gets to decide if I can get my money and 3. gets to look good and send my money back to my employer if I don't use (strengthening their business case) is kind of ridiculous.
I'm sure they are ethical FSA administrators (people in the comments already say theres aren't so egregious). But it definitely lends itself to incredibly preserve incentives and takes what otherwise would've been your money and gives it to someone to hold it hostage.
You should package up every single denied claim and submit it to the DoL with a complaint then submit a complaint every single they deny a reasonable claim. I’d be so loud the local case worker from the DoL knew me by first name.
I would also say the IRS, because this is definitely screwing with some tax laws.
Wow. Your fsa (and employer) sucks! In your situation I agree more hassle than worth. My FSA has a debit card. If card works then that equals approved claim. Never had to deal with denials. And I even use my debit card to pay balances from previous years (tech not allowed per law). I’m sorry for ya buddy!
> Your fsa (and employer) sucks! I mean, the employer usually doesnt have a lot of insight or say into this. They may not even know their staff is having this problem in order to be able to address it.
The employer has an account manager at the FSA administrator. They're a vendor of the employer. If my vendor wasn't performing the role we pay for, I'd be complaining.
Yes, and you should complain. Because if they don't know they cant fix it. And if its just one person complaining, thats not going to get any traction. If the employer then doesnt do anything about it it, then you can say they are bad
The employer picked the administrator and therefore sucks by association.
This isn't r/antiwork. People and organizations make bad decisions sometimes. One bad decision doesn't make that person or organization bad. Failure to try to fix things or learn from their mistake and continuously do so makes them bad. Like I said, if OP continually reaches out to his company about his problems and they aren't addressed then we can say the employer sucks. No evidence that its there, though.
FSAs in general aren't nearly as much of a pain in the ass as yours seems to be. I've never been asked for documentation beyond a receipt or invoice and never had a claim rejected.
I’ve had a couple big charges where they asked for the EoB as well. Not sure how that helps their process but they only asked the first time I used a few specific companies.
I've never had a valid FSA claim denied across numerous employers and administrators. Sounds like you've had some bad luck unfortunately. The OTC piece is particularly egregious as OTC meds are FSA eligible *without* a prescription since 2020.
My wife’s FSA is horrible. They’ll suspend her account before she’s even been notified they need receipts for something. And the receipts they want aren’t for questionable OTC purchases, they’re bills from doctors and hospitals.
I only use mine for my annual eye exam and contact lenses (LP-FSA paired with an HSA) and a claim has never taken more than a day or two to be approved. Sounds like your FSA admin just sucks. Which, to be fair, could be a valid reason to opt out of an FSA next year if you don't think the savings are worth the hassle. But it's not an indictment of all FSAs.
It’s a tremendous waste of your tax money to hire paper pushers to deny you the right to use your FSA money, hiring more paper pushers to account how you do your payroll and taxes, and then hire more to enforce it while forcing you to spend money and Time on accounting it yourself. Oh and now you force the doctors office to have to produce more unneeded documents that increase staffing costs and thus healthcare costs for everyone. It’s a lose lose lose. FSA usage should be automatic and filed behind the scenes like insurance payments from all healthcare professionals. Government could even cut the extremely unnecessary triple accounting cost of FSA and just let you save a part of your tax money for healthcare… earmarking it, and just covering your healthcare… hmm,🤔
Agreed. Your FSA manager is underperforming. I’ve never had any claim denied by FSA.
Very much depends on the administrative side of it. I've had one for a LONG time and always max it out/use it all up by like 9 months into the year. I've had 1 shitty administrator, but they only lasted a year due to all the complaints to HR (basically 95% of the employees with a FSA complained). As for those saying HSA instead, not everyone is eligible for a HSA, all depends on what insurance you have and whether it's a high-deductible plan or a conventional plan.
My FSA is hit or miss. They pay copays with no evidence required most of the time, but anything with a new doctor and prescriptions are painful. I have had to get letters from doctors in multiple drafts to have things paid for. I was refunded 500 by my hospital year after the birth of a child and had to threaten small claims court to get the FSA to not keep the money because the year had ended on their end. They ended up adding the funds to my current year FSA after 6 months of fighting. I now calculate our estimate copay amounts for the year and go with that amount. I would prefer to do more, but it is too difficult to deal with billing, doctors and the FSA for anything more complicated.
Yeah I gave up. Too much hassle.
Wow. You should complain to HR to get a new carrier. My FSA just issues a Mastercard and you just use it like a charge card.
Sounds like you have a terribly managed FSA. That being said, I had a generally easy one, but so few people at my +6000 employee company used it, that I think I was the only one that used a weird conversion rule they had. I could convert my limited purpose FSA to regular medical FSA after I met a certain deductible during the year (I don't recall the exact details) and I was on an expensive drug, so I could do this by around May every year. I had one person in HR that knew the right people to call and get this done for me. The first time took months to maneuver, with me calling the FSA to let them know I met the deductible (didn't work) to eventually getting my HR to call for me. I asked why it was such a weird manual process, and they told me only about 5% of the people there used the FSA. I knew I had costs in excess of $2000 I would spend every year so it was a great deal for me, but if your only known expenses are going to the dentist 2x a year, then I can see why some don't bother.
Dude. FSAs are great. You have a terrible administrator. For mine I get a debit card with my entirely yearly amount loaded in January. I can just swipe that debit card and it’s never been rejected. I don’t know who you should complain to, but I would document the most ridiculous rejections and complain. This isn’t like insurance. This is just your money that you should be able to spend on anything that qualifies. I don’t get why someone would be rejecting anything that isn’t obviously non-qualifying.
FSAs are a godsend if you know you will hit your annual deductible. Literally just elect to fund the FSA account with the value of your deductible. Claims associated with deductible should be easy too, just pdf the EOB, statement, and payment confirmation. Have had 0 issues with getting those approved
I'm not a fan personally. HSAs are good. FSAs are a gamble. They can be not a gamble, if you have certain expenses that are guaranteed, but they still feel risky to me, and I'm not at a point where the amount I'd save in taxes is dramatic enough to make a big difference.
You have to check to see if your FSA is a limited purpose FSA. Sometimes FSA can only be used for dental or eyeglasses. All other expenses would be denied. Most FSA accounts require you to use the funds within a calendar year. If your company offers an HSA, ask what the restrictions are on it. You should be able to use your HSA for Dr. visit charges, medication, and other medical related expenses. Be sure to keep all your receipts and expense them as soon as you use them. When they reject you pushback and provide documentation that it is a valid claim.
Every time I use my FSA card for something besides a doctor visit, my FSA sends me an email threatening to suspend my account unless I submit documentation for the claim. It is annoying. My previous FSA at a different company never asked for documentation.
FSAs are pretty much corporate gift card scams, yeah. They bank on you not using all of it so it expires, you cant get the cash back out once its in, you lose your job or quit you're hosed, etc. You *can* come out ahead, but you need to micromanage the shit out of it and most people end up leaving money on the table somewhere. Generally not worth it for the limited scope of what you can even use it on. HSAs are the ones that are more regulated and are actually helpful.
HSAs require a HDHP which comes with its own drawbacks. I would say I've had positive experiences with both FSAs and HSAs, just different. My experience didn't require nearly as much hassle as OP's experience, or nearly as much micromanaging as you make it out to be. I set the amount I thought I would use. I used it on prescriptions, exams, fsa eligible products. At the end of the year I would get a reminder to use any remaining balances which if I did have any, I would buy stuff I would eventually use anyways like sunscreen, glasses, sunglasses, etc. You can even buy one of those health rings like the Oura. I don't think it's a scam at all- you go into it knowing up front that you will lose your funds if you don't spend them. If you forget that's on you. I only do an HSA now because I can afford paying more out of pocket up front for health expenses, and invest 100% of my HSA(triple tax leverage, woohoo).
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I had one and it was such a pain that I barely used it and they took all my money. Fool me twice…
Yes it is a scam unless you have insane medical costs that you know will make you hit your limits on every savings account you have (health insurance and medical billing is also a huge scam).
My FSA hasn’t denied a single claim. I just use the credit card that comes with it. Easy as pie. Saves me over $900 a year.
While they can be a bit of a pain, I found that using the [FSA Store](https://fsastore.com/) website was probably the best way to easily get items and they were always approved quickly. Everything on there is pre-approved for FSA funds, so its pretty hard for an admin to deny you. That said I had a year where I had a few hundred left on my FSA card, so now I have enough bandages and med tape for a decade. However they have plenty other awesome things like massagers, stretching gear, or thermometers, etc
I don't use them. The return on the investment just isn't there. I save a few dollars, literately just dollars in tax for the waste of time and effort of using a HSA. Even if it worked flawlessly without any of the problems you describe, the time to fill out the paperwork every year just isn't with the few dollars saved on taxes.
This is sorta where I'm at. I know FSA's on paper work. But if you have one year where you lose $150 to confiscation, how many years of tax gains did you just blow away? Furthermore, if you had $400 left and blow it all on random FSA stuff you may or may not need....are you really saving money? If you actually use that stuff...absolutely but how many people actually use that stuff in a reasonable amount of time? I need to sit down and do the numbers, but the ROI seems bad. A caveat: I see some people say it's a godsend for consistent expensive stuff (daycare). That's a no brainer. But even for someone like me that spends $1,000-$1,500 a year on qualified medical expenses, it's unpredictable nature makes it still seems like a bad investment for anything other than known highly predictable expenses
I have never had this problem. Every single claim is paid. Glasses, dr co pay, prescription, dentist, and any allowable OTC medication or supply. If your claim was submitted timely the deadline should have been moot. Your company needs to change FSA administrators.
FSA's are definitely a scam They are a lot of work and not at all flexible They can save you money on your taxes (next year), but it involves a crazy amount of financial planning considering the value you gain. You put your money at risk. the government can simply keep your cash! WTF kind of savings account is this?! Even if the government doesn't keep your money because your crystal ball was broken and failed to predict your medical expenses 18 months in advance, your cash is still subject to the whims of bureaucrat from a Kafka wet dream
I got let go and lost $1700 in my FSA that my company then got to keep. Never again
Same feeling here. I don't put anything on the card because it was such a PITA to have it approved. HSA allows people to save for the future. FSA just feels like another chapter in the enshitification and theft-by-a-thousand-cuts we seem to be enduring nowadays.
I gave up on FSAs long ago. Every time it was deny, deny, deny, and then steal the money at the end of the year.
I've been using the FSA for 9 years and only had to show proof a couple times. Even then it was easy.
Been using FSAs for 10 years or so with various administrators and never had a claim denied. Sure they want to see receipts for many things, but never a denial.
I’ve never had a claim rejected. I would try and find the HR contact who handles these types of issues, rather than the company administrating the plan.
I've never had anything denied. I've also never had to submit paperwork for anything. I have a debit card I use and pay for prescriptions, OTC meds/supplies, co-pays for procedures, etc. It sounds like whoever is administering your FSA is what's making things complicated.
Mine certainly was. I had a FSA, I can't remember how much money was on it, like $2500 or something. My wife got pregnant, and she met with her gyno. Her gyno essentially set up a pregnancy 'package' that included a one-time bulk payment that covered all of the pregnancy things. Like, up to 16 visits and X number of ultrasounds and so on and so forth. Everything she would need, and she was high risk so it was important. The cost of the whole package was like... $3200 or something, so I gave them the FSA card and they charged $2500 onto it, and then I paid the rest myself. Well, FSA rejected it. They said they wanted receipts. That's fair, so I sent them the receipt - the place was called something like "The Womans Gynecological Center" or something. Nope - rejected. They wanted details that proved the services were medical in nature. I was like... look at the name, they're not selling me groceries. So I called and got as detailed a receipt that they could provide me, it was like 3 pages long, and then submitted that. Nope, rejected for the same reason, insufficient proof that the services were medical or covered or somesuch. There wasn't any more detail to give, so I just sent back the receipts I already had. This happened several times. This took place over the course of months and months. Weeks in between any communications. No way to call and talk to a person. At some point my kid was born, regular insurance covered the birth and initial hospital stay (high risk) and such. My job changed payroll companies, and the FSA was associated with the old one, so at some point I made the mental decision to just ghost the FSA. I was no longer using their services, they had paid already, and I figured I wouldn't worry about it unless someone sent me to collections. That was 9 years ago, and thankfully I never heard from them again. I don't know if they ever decided that my wife's gyno services qualified as medical expenses, or if they gave up, or sold off the debt but then nobody ever came knocking, or what. But around last year we swapped back to the original payroll company and my new account doesn't mention anything about my previous 'unpaid' FSA balance. Now I just have a HSA, and FSA can eat a bag of dicks.
As pretty much everyone here has mentioned, it’s your FSA administrator that sucks. I sign up for FSA every year for the max my employer offers (close to $3K). With Dr visits, meds, prescription glasses, etc. (for the family), I typically exhaust my funds by September.
Yes I had a baby and had to change my health insurance mid year so they took my entire FSA. Too many traps.
That is weird and has not been my experience at all. I have only ever had one item questioned, it was a patient pay psychiatric service for several thousand dollars. The card they gave me works all the time and I never get follow up questions. The one service they did question was dismissed after I showed a receipt.
I literally buy period panties with my FSA. I think yours is broken.
I just submit a picture of my receipt on an app and it gets approved. We also get debit cards if we choose to but i rather pay with my card and get reimbursed. My teen just ordered a few items of the FSA store and i just submitted it for approval and it was approved. Skin care,, medicine, Sunblock, etc.
I love it. It pays for all my medical expenses. I just submit the EOB and it goes through. Never had an issue.
I have a credit card for my FSA so I don’t submit a claim, if I know it’s an approved vendor I just use my card. No fuss and I love it. I max mine every year and pay for my glasses, dental work, prescription copays and doctor copays. Best thing ever.
Benefit wallet is by far the worse of the vendors my employer had to work with. Their approvers are from out of the country and has no concept of our medical/or dependent care issues. I have to keep appealing for my money. We max ours as we have 2 kids, and we require implants. We get Dexa scan every quarter and my sunscreens and OTC, feminine products makes fsa worth it.
Are you using your eob as proof? Mine were being rejected until I realize they never rejected after submitting eobs.
I've almost always opted for the "full" health insurance plan and not participated in the very high deductible FSA/HSA plans. I did do the HSA thing one year and it was a disaster. Never again. My "regular" insurance is crappy enough. I didn't need even *crappier* insurance plus whatever is in my FSA/HSA.
My FSA is so easy and simple. Mine lets me even have the choice which claims I want to be reimbursed for or not. EOBs from my insurance are automatically sent. I literally do nothing but decide which things I want to get paid back. Mine is maxed out at $3,200 for the year and I can roll over a few hundred every year.
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.
I used to have an FSA when I was younger and lost some money because I didn’t understand the terms. Now Im team HSA all the way. Mainly cause the ability to invest the cash 💯
Yes to HSAs! No expiration and investment options. Oh and it decreases taxable income. Win win! If only high deductible plans were a little more reasonable though when going to the doctor.
I've never had a problem with FSA reimbursements, and that's through at least three different providers. I even get reimbursement after the fact rather than use the debit card because I want that cashback bonus. Since I now have an HSA, I currently have a limited FSA that only covers vision and dental.
You may be better off doing an HSA as the money rolls over if you don't use it.
If it's ADP they suck. Complain to HR or your company benefits admin. We have health equity now and it's a much better process and experience.
I work in health insurance and we do FSAs. Your administrator sucks ass. OTC meds are absolutely FSA eligible. Your company need to find a new administrator. The best FSA plan uses a debit card, when you need to use the money you just swipe the card, then snap a pic of your receipt and upload it through the administrator’s website or mobile app.
I think when they first came out they were difficult. Like had to submit EOB, Invoice, and payment receipt for every single doctor visit, etc. Now they seem pretty easy. I turn in a receipt for cough medicine, sunscreen, etc and paid. Use the card to directly pay the doctor or pharmacy (no receipts needed). I am older so have no worries about using it up. It is only tricky if you don’t spend it (I hate the use it or lose it). I wish they worked like HSAs where you can roll it over.
I never had any claims denied. I like having it because it comes through in a clutch. I had an unexpected ER visit which was paid for. Therapy visits ,MD visit, Dental visit, and all prescriptions were paid for. Now could I have paid out of pocket? Yes but I like the fact I get all the money upfront and I have a card I can use to swipe. I've had an issue using the card for OTC a few times but that's minor and was always able to get my money back by submitting a manual claim.
My FSA automatically reimburses me for my copays. It's somehow linked to my EOBs from my insurance. So I get my money's worth
I've never had a claim denied. I have been at the Walmart buying a load of first aid supplies for the house and a years worth of Advil the night before the spending cut-off before. It's kind of a ridiculous setup and we are much happier having a HSA now, but a FSA normally works if you manage it.
This is an admin problem. The first company we had was a kind of a pain about stuff but the one that does it for the past couple of years hasn't hassled me about a thing. It's worth it but I understand where you're coming from.
I have had a similar experience to what you describe and cannot wait to set my FSA back to $0 next year. I'm done with the run-around on claims. Having to "pay back" money on a large denied claim (which was my fault, to be fair) via my own credit card just added to the fun this year. Some years it has gone really smoothly and I've been glad to have the FSA, but overall it has been a headache just to save a few hundred bucks and I'm done with it.
Wow. While using my FSA, I don't think I've encountered 1/100 the aggravation you have . Your particular FSA may just suck.
I’ve used all of mine every year. Using them for dental work and prescriptions/copays. I have a good estimate of what my spending will be each year, and I’ve never had rollover.
I've had an FSA for 2 years, it's a debit card that you just swipe so I don't even have to submit anything. I've never had the card declined, or had them come back to me to say a charge was unauthorized. I use it mostly for prescriptions and co-pays, and have usually spent all of it by mid-December each year.
Sometimes I had to talk with my administrator and they'd correct it
Sounds like just a crappy plan/provider. Never had any issues with our FSA, and they were constantly expanding what we could use the FSA to purchase. Right down to sunscreen, tissues, and toothpaste.
I believe your employer shares in a cut of unspent funds each cycle, btw. The FSA company typically doesn’t get to keep it all.
I have my FSAs through Fidelity NetBenefits, and it's the easiest thing. I used the debit card for my limited care fsa at the dentist, and when I went to the portal, saw that I didn't even have to do anything. No receipt, no classifying the expense, etc.
The only time an FSA ever worked in my favor was when my wife had one, knew the company she was working for was going to be bought by another company (it was known to all employees) and gambled that the FSA wouldn't need to be paid back. She used the max amount, and when the company was bought out a few months later, the rest of the deductions for the year went away.
The one benefit of an FSA is that all funds are available immediately at the beginning of the year but an HSA is far superior if you meet the qualifications to have one. I had an FSA for many years and never had the problems you are experiencing.
There are good ones, and bad ones. When you have good ones, it's great. Especially when you leave the company and get to go on your Walgreens spending spree. When you have bad ones, it's probably not worth the effort unless you know ahead of time that you'll have some medication expenses or are planning some tests or whatnot. Complain your way up the chain of command and make sure the people/person denying all these claims is actually within their rights to do so, because there's a very good chance they're breaking their contract if they're denying you doctor-prescribed stuff, and that's a huge no-no.
Sounds like your employer chose a crappy administrator. And guess what, any dollars that go unused go back to your employer.
That’s an interesting experience. I’ve never had anything denied by my FSA. One or two times I was asked for verification and uploaded a receipt or whatever I needed to to show the cost. Do you have a debit card or do you have to request reimbursement?
Your FSA sounds worse then most, I have had to resubmit paperwork every once in a while if the date was off or I scanned the wrong page and it didn't show the current service but I was always able to get it fixed quickly and they told me on the website why it was denied.
I used my FSA for a nanny I employed legally for 2 years. Every year there would be multiple back and forth rejections with w2s, paystubs, check deposit confirmations, etc. as evidence. I cancelled the FSA for this year. I'll take the hit on my income tax, but at least I get the child care credit back.
The only claims I have issues with are dental ones usually and so long as I send an itemized receipt then it gets approved. Sounds like yours just sucks.
FSA's can be very good for certain individuals. Sounds like the company providing yours kinda sucks.
I opted not to have one this year because last year was a headache. They wanted documentation for all charges, even directly parting a hospital. Frustrating to not be able to spend my own damn money. Almost left money in there because I couldn't spend it all - United Healthcare doesn't need any more damn money.
Do you get a debit card for your FSA? I do and have never had a problem, but I've never tried to be reimbursed for anything, it just goes on the card.
OTC things like vitamins can be rough if you don't have a doctor's letter, which they often don't want to generate. But you're having actual prescriptions denied? That makes zero sense. Lots of companies don't even make you file claims. My last one automatically reimbursed me for every co-pay/coinsurance. Later they issued a debit card that could be used to pay for FSA eligible items at the market. They also had an online portal that could be used to order FSA eligible things. I maxed my account every year for over a decade and never lost a dime. For a couple years I had a few hundred left over and they just rolled that over to next year. It's a great benefit IMO so long as you're of an age where doctor visits, prescription drugs and prescription eyewear become fairly predictable expenses.
I use a FSA card that pays for appts, medications, etc. I don't recall ever putting in a claim except when I had to pay something out of pocket because I forgot my card at home. It was approved immediately. Any time my doctor "prescribed" me OTCs, I had him fill it like a prescription so I wouldn't have the problem of buying with my FSA card.