10 Comments
Dec 27, 2022Liked by Don Moynihan

My FSA used a credit card, so no forms needed! I kept the fsa card on file at my pharmacy so the charges for prescriptions went right through the fsa account. Yes it is tricky to estimate how much you need each year; I generally underestimated and ran through my funds by November/December

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Dec 27, 2022Liked by Don Moynihan

They benefit those who make more money. But I agree its a hassle. Using the debit card that may come with the FSA as a convenience actually means you lose the 5% rebate you could use with certain credit cards such as Target red card, or the Amazon for medical items. (and 1-2% for a regular rebate credit card) all to save in filling steps.

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Dec 29, 2022Liked by Don Moynihan

I changed employers — and FSA administrators — in 2021, so I have a recent comparative experience to share. My former FSA automatically itemized debit card transactions at, say, CVS and therefore didn’t require receipts for the small stuff. The larger medical expenses required a receipt but not an explanation-of-benefits report. So, eyeglasses and blood labs and so on? Just a receipt, and then some very basic information in a simple online form.

I am convinced that the business plan of my new FSA provider is deny, deny, deny. Every single transaction, however small, requires a receipt. All expenses from my family’s doctor appointments require both a receipt and an EOB with matching amounts. Except that the receipt has to clearly state a lot of information about the provider, and not all providers print that on the receipt. Sometimes, after repeated failed attempts to get a clearer receipt from the healthcare provider, I have resorted to using Adobe Acrobat to edit a scanned document. The company (Wageworks) has denied claims with only an overly broad explanation, with no instructions on how specifically to correct the error. When this happens for a small-change receipt, it hardly seems worth it. I wonder if an investigation or reporting requirements would reveal claim denial rates suggesting a policy to make our lives incrementally miserable. (I complained to my HR department but their response was straight out of Bartleby.)

Several years ago I signed on to my employer’s HSA insurance option and gave it up after only one year because of the bureaucratic burdens on my and my family’s time—not to mention the healthcare providers’ time spent dealing with my requests for just the right documentation. I now pay too much for insurance so I don’t need yet another spreadsheet in my life. But I feel like this FSA is putting me right back into that floating-island labor camp (sorry, I just watched “Andor”).

On behalf of all prisoners of this bureaucracy, please keep asking these questions and pressing employers, FSA administrators, and elected representatives to change this awful program. Thank you!

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Dec 28, 2022Liked by Don Moynihan

Using an FSA card for medications and hospital and clinic expenses is simple. We estimate yearly expenses based on the previous year and known upcoming health expenses. We aim low so as not to waste at the end. The entire process takes about 5 minutes a year and saves us the marginal tax on the money. I love saving $500 a year for something so easy. Marginal tax rates are >> than the 2% or 5% cash back from a regular credit card. But: I totally agree it’s regressive and ultimately not needed. We should make things easier for everyone, especially people who have lower incomes and resources. We create cottage industries that ultimately are wasteful.

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I’ve had not one but two financial advisors recommend this to me and I was like NOPE. Thank you for the validation!

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Thank you for shedding light on this! One thing though, sunscreen that's baked into products people are more motivated to use like skincare and makeup is a great nudge, not a dark pattern.

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I think that even if the process was easy (which it isn't) there is still a problem with incentives. If the employer or the administrator of the system gets to keep unspent funds then they will then maximize the amount of money that reverts to them. Hence there is encouragement to be complex, opaque, and non-responsive. I ended my contribution to FSAs years ago. I haven't missed them.

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In my experience, the real absurdity hit when we moved to a high deductible/HSA plan while still carrying <$100 in the FSA (I think you can carry forward up to $125 or so to the next year). As long as I have funds in the HSA (which I likely always will, as I've been advised to consider this more like a savings/retirement account and so over-contribute), I can't use the FSA for anything but specific oral or eye-care expenses. The kicker: toothbrushes are *not* an allowable expense!

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There’s also other FSAs, limited , daycare, any others? Very confusing to learn and track.

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My FSA is the lowest hassle part of the whole process. With paperless reimbursement it shows up in my account. I’ve never had a claim denied and I’ll use every penny of it before the end of January this year. And I put in the max amount. Employers can choose to contract with competent firms or not. It doesn't have to be a mess.

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