One of my goals this year was to max out my FSA contributions. Even though I had until December to do it, I actually was able to complete this task before the end of June. I allocated $900 towards my account and spent all of it on doctor’s visits, dental work, and prescriptions. At a 25% tax rate, that saves me $225, not including the interest I gained from getting this money in advance. In hindsight, I definitely should have allocated more to my FSA, but I simply had not anticipated the dental work I required this year, which was well over $300 in spending.
Anyway, while I am a huge proponent of using the FSA, this does not mean it is always a smooth and easy process. I encountered a number of unexpected issues with my account.
Documentation is Required on Almost Every Transaction
My FSA plan provides me a credit card which automatically deducts from my allocated balance to pay for legitimate services. The problem is, even though the transaction goes through on my credit card, the HRA Administrator almost always sends me an email asking me to back up my claim with a receipt. For my first year using this account, they’ve required documentation on all my transactions except for prescription purchases. I really think the distrust is a bit unwarranted when the vendor is titled “Dr. Steve Wong, MD.” Come on FSA Admins, I’m not trying to rip you off.
Reimbursements Are Delayed Up to a Month
There have been times when I could not use my FSA credit card to pay for services. For those situations, you need to file a claim through the online system, provide documentation, and send it to your administrator. The process was easier than I thought it would be, mainly because I used my company’s printer and scanner to complete it. But I still have one gripe about the reimbursement process – it takes too freaking long. Every time I filed a claim online, it took about a month for me to get the money back. I never received any updates on the status of my claim – I just had to keep checking their website until it showed my claim was approved. While this definitely isn’t a reason not to use an FSA, it’s still really annoying.
The FSA Administrators Provide Poor Customer Service
Like many understaffed call centers, the customer service department of your FSA can be very difficult to reach. You’re given a specific contact to reach regarding FSA questions, but within your company, it’s possible that everyone has a different representatives. This is because the reps do not specialize by company. While it’s not impossible for a customer service representative to handle multiple clients, it definitely makes the process more inefficient. It would’ve be nice if we had one or two reps dedicated to our company answering all of our questions.
It Becomes Harder to Track Expenses
Most of the dollars in my FSA account were spent through my FSA credit card. From a cashflow perspective, this means that there is no cash transaction. The amount is taken from an allocated balance that theoretically is deducted from each one of my paychecks throughout the year. The FSA online component does not provide a transaction download functionality and I’m too lazy to create a specific ledger myself in Quicken.
What upsets me about this process is that it makes it more difficult for me to track my healthcare expenses. I essentially have to add $900 to my healthcare expenses to get an estimate of the annual total. Because I’m really anal about these things, I would’ve preferred to have been able to track these expenses directly by transaction type and month.