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Flexible Spending Accounts - Total Sham

Flexible Spending Accounts - Total Sham

Old Jan 18th 2014, 1:23 am
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Default Flexible Spending Accounts - Total Sham

Not sure how many others here take advantage of FSA's but I'm counting myself in the no camp as of next year. Apart from seemingly always having to provide receipts for everything (makes you feel like you are cheating them), I just had a situation that proves that corporate robbery is alive and well.

Back at the end of Nov I had some dental work done. Paid $260, which was my ESTIMATED co-pay on the FSA card. Two weeks later (mid Dec) I get the usual 'please submit more details' email, which I duly do. Just after Christmas I get a letter from my dentist with a check for $116 attached saying that insurance paid more than the estimate and here's the difference back. Around Dec 28th I get an email saying that the FSA overpaid and they want my money back! By the time I contact them it is the new year and they are insisting that they get repaid for the overpayment.

I ask ok, fine, but since my company didn't allow a roll-over (IRS changed the rules late last year and most companies decided not to allow roll-overs) what will happen to the money? Get this -they tell me that since we are into the new year and my plan doesn't allow for a roll over the money is forfeited (going to my employer with a service fee deduction). I don't blame my employer here BTW.

So my money, that I have in my bank account (and yes I would pay tax on it if that were an option) has to be repaid and I have no option to spend it. Of course if I had any money left before the end of the year I would have spent it but I didn't due to the FSA's tardiness in getting this all figured out.

At this point I am getting more than a little annoyed and ask what will happen if I don't repay. They said they would suspend my FSA (which they have done), they would report me to the IRS and the account will go to collections along with penalties and interest. To cap it all since open enrollment is now closed, I can't withdraw from this years FSA contributions, which are $50 per month. So basically they are holding me over a barrel.

I can't wait for open enrollment this year to select no on the FSA. Good riddance!

Grr

- Tim, Aka grumpy old man
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Old Jan 18th 2014, 1:53 am
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Default Re: Flexible Spending Accounts - Total Sham

Which is why I have a Health SAVINGS Account. My money goes in, pre tax, and it remains my money until I spend it on qualified healthcare expenses.
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Old Jan 18th 2014, 2:37 am
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Default Re: Flexible Spending Accounts - Total Sham

Originally Posted by TimFountain View Post
Not sure how many others here take advantage of FSA's but I'm counting myself in the no camp as of next year. Apart from seemingly always having to provide receipts for everything (makes you feel like you are cheating them), I just had a situation that proves that corporate robbery is alive and well.

Back at the end of Nov I had some dental work done. Paid $260, which was my ESTIMATED co-pay on the FSA card. Two weeks later (mid Dec) I get the usual 'please submit more details' email, which I duly do. Just after Christmas I get a letter from my dentist with a check for $116 attached saying that insurance paid more than the estimate and here's the difference back. Around Dec 28th I get an email saying that the FSA overpaid and they want my money back! By the time I contact them it is the new year and they are insisting that they get repaid for the overpayment.

I ask ok, fine, but since my company didn't allow a roll-over (IRS changed the rules late last year and most companies decided not to allow roll-overs) what will happen to the money? Get this -they tell me that since we are into the new year and my plan kdoesn't allow for a roll over the money is forfeited (going to my employer with a service fee deduction). I don't blame my employer here BTW.

So my money, that I have in my bank account (and yes I would pay tax on it if that were an option) has to be repaid and I have no option to spend it. Of course if I had any money left before the end of the year I would have spent it but I didn't due to the FSA's tardiness in getting this all figured out.

At this point I am getting more than a little annoyed and ask what will happen if I don't repay. They said they would suspend my FSA (which they have done), they would report me to the IRS and the account will go to collections along with penalties and interest. To cap it all since open enrollment is now closed, I can't withdraw from this years FSA contributions, which are $50 per month. So basically they are holding me over a barrel.

I can't wait for open enrollment this year to select no on the FSA. Good riddance!

Grr

- Tim, Aka grumpy old man



I agree, it can be very frustrating and unless it gets changed to a Health Saving Fund I think I might drop mine next year.

It was great to have when I needed it to help with some of our recent expences but I get so annoyed about having to keep sending extra information as proof the money was used for medical expences. I mean, when the receipt has the name of the hospital on it and says surgery center what else could it be for??
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Old Jan 18th 2014, 2:39 am
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Default Re: Flexible Spending Accounts - Total Sham

Originally Posted by TimFountain View Post
IRS changed the rules late last year and most companies decided not to allow roll-overs
You have never, until recently, been allowed to roll over an FSA. 2014 will be the first time in 30 years you were able to roll-over unused funds, capped to $500.

I sense your frustration, but nothing is unusual here. This is how it has always worked. You choose the tax free plan, and one would hope you understood the risks.

http://www.treasury.gov/press-center...es/jl2202.aspx
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Old Jan 18th 2014, 2:50 am
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Default Re: Flexible Spending Accounts - Total Sham

Originally Posted by Sugarmooma View Post
I agree, it can be very frustrating and unless it gets changed to a Health Saving Fund I think I might drop mine next year.

It was great to have when I needed it to help with some of our recent expences but I get so annoyed about having to keep sending extra information as proof the money was used for medical expences. I mean, when the receipt has the name of the hospital on it and says surgery center what else could it be for??

Ohhhh I dunno, SM... Haven't they caught on that you secretly book all of your Caribbean holidays that way?
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Old Jan 18th 2014, 2:53 am
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Default Re: Flexible Spending Accounts - Total Sham

Originally Posted by AmerLisa View Post
Ohhhh I dunno, SM... Haven't they caught on that you secretly book all of your Caribbean holidays that way?
Oh, if only!
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Old Jan 18th 2014, 3:00 am
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Default Re: Flexible Spending Accounts - Total Sham

Check and make sure they are giving you accurate info, you may still be able to submit claims for reimbursement for stuff that happened last year. I think FSAs and dependent care account suck though, too many restrictions and problems for a small benefit.
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Old Jan 18th 2014, 6:55 pm
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Default Re: Flexible Spending Accounts - Total Sham

Hi

My understanding was that you have until Mar/Apr of the following year to complete all reimbursements for the previous year. Not sure if this is dependent on the employers rules, but something to look into.
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Old Jan 18th 2014, 8:18 pm
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Default Re: Flexible Spending Accounts - Total Sham

I hated our FSA. They constantly screwed up my refunds or demanded receipts for situations that didn't warrant them (which they eventually admitted every time after keeping me on hold for 20 minutes).

At one point they were trying to get me to provide receipts for a $11 payment, which I had paid using the last $11 in my account. I had no intention of enrolling the following year and had already cut up my FSA card. They told me that if I didn't send the receipts they would suspend my card and that they might try to get my company to take the $11 out of my payroll.

I told them to go for it if that was the kind of way they chose to waste their own resources.

I put in an official complaint to my employer about them, and I obviously wasn't the ony one as they were dropped as our provider at the end of that year. We also stopped selling their services as an FSA provider alongside our products.
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Old Jan 18th 2014, 9:05 pm
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Default Re: Flexible Spending Accounts - Total Sham

Originally Posted by Pulaski View Post
Which is why I have a Health SAVINGS Account. My money goes in, pre tax, and it remains my money until I spend it on qualified healthcare expenses.
Just watch out for all the nickel and dime fees that HSA providers try to charge.
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Old Jan 18th 2014, 11:06 pm
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Default Re: Flexible Spending Accounts - Total Sham

Touch wood, having nothing but good experience with our FSA. Never had to submit a receipt (always swiped like a debit card) and never been questioned. Guess I'm just one of the lucky ones?
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Old Jan 19th 2014, 1:21 am
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Default Re: Flexible Spending Accounts - Total Sham

Originally Posted by AdobePinon View Post
Just watch out for all the nickel and dime fees that HSA providers try to charge.
So far I haven't had any and I haven't seen any listed, just a surprising interest rate that makes a little money each month.
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Old Jan 19th 2014, 1:52 am
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Default Re: Flexible Spending Accounts - Total Sham

Originally Posted by Duncan Roberts View Post
So far I haven't had any and I haven't seen any listed, just a surprising interest rate that makes a little money each month.
Likewise, runs just like a 401K. The next time the market takes a dive I'm going to move some of the balance over into some of the investment funds. I wish I'd moved over to HD insurance and an HSavA years ago.
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Old Jan 19th 2014, 3:53 am
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Default Re: Flexible Spending Accounts - Total Sham

While working we had an FSA option but no HSA option. FSA was a PITA and I always put in less than we actually spent rather than risk losing contributions.

Now that we are retired we have retiree insurance with my former employer, which is great, but the premiums are now paid with after tax money and I have no FSA or HSA.
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Old Jan 19th 2014, 3:58 am
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Default Re: Flexible Spending Accounts - Total Sham

Originally Posted by kins View Post
I hated our FSA. They constantly screwed up my refunds or demanded receipts for situations that didn't warrant them (which they eventually admitted every time after keeping me on hold for 20 minutes).

At one point they were trying to get me to provide receipts for a $11 payment, which I had paid using the last $11 in my account. I had no intention of enrolling the following year and had already cut up my FSA card. They told me that if I didn't send the receipts they would suspend my card and that they might try to get my company to take the $11 out of my payroll.

I told them to go for it if that was the kind of way they chose to waste their own resources.

I put in an official complaint to my employer about them, and I obviously wasn't the ony one as they were dropped as our provider at the end of that year. We also stopped selling their services as an FSA provider alongside our products.
Mine wouldn't accept a $15 copay for a doctor's visit for some reason (must have thought I was off to the Caribbean with SM). I had to go through an unbelievably arcane process of filling in a pretend check to reimburse them.
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