Are You Leaving Money on the Table?

Last weekend’s Wall Street Journal Weekend had an article by Ron Lieber titled “The Easy Money People Ignore.” I have to admit that FSAs are a pain to use. I hate the “use-it-or-lose-it” rule. After all, it’s MY MONEY! The article does offer up some decent solutions to the FSA’s shortcomings. However, I think a couple of thingscould be done to make FSAs more flexible:

1. Allow account holders to make adjustments to their accounts during the year. The third-party provider has a record of what payments were made. If the account holder hasn’t spent the money they allotted at the beginning of the year, they should be able make changes to their account.

2. Allow for direct deposit. I hate getting checks in the mail. I much prefer direct deposit.

3. Make submissions web-based rather than paperwork intensive.

Those are my ideas. Do any of you have any other suggestions?

5 thoughts on “Are You Leaving Money on the Table?”

  1. I was thinking about blogging this same topic when I read it in the Journal, but didn’t find time to do it. I love FSAs. My employer makes it even sweeter by matching the money I put in FSA up to a certain amount. The use it or lose it feature is a little intimidating. For every dollar in the FSA, excluding taxes and employer matching, just a little over 50 cents are my after tax money. If I did not use up the whole dollar and lost 20 cents by the end of the year I am still coming out ahead. Childcare accounts are easy to plan because you normally know how much your kids’ day care charge you for. Medical accounts are a little tricky because things could fluctuate a bit.

    My FSA does direct deposit already. Most of the medical expenses were filed automatically when insurance claim are processed (insurer pays their share and the balance are filed to my FSA). At my regular pharmacies, I don’t even pay the co-pay out of my pocket. The pharmacies get the co-pay directly from my FSA providers. The only thing I have to file a paper claim for is the childcare expense and I do that once or twice a year.

  2. My wife signed up for the FSA this year with the US Govt. for medical expenses. She hates it. She spends a bunch of time chansing receipts, filing out forms, resubmitting rejected claims, etc. It is a real paperwork headache for her, and a souce of much frustration. I plan to go to an HSA medical plan and am urging her to do it also. It looks sooo much easier, and a much better investment.

  3. The use it or lose it rule can be intimidating, but with the recent changes to the rules allowing you to use expenses from the first 2 1/2 months of the following year combined with the many over the counter items allowed, should prevent most people from really losing. Also, while leaving some money in (losing it) doesn’t feel great, you haven’t really lost any until you’ve left enough to offset the tax savings the FSA gives.

  4. what is the point of these mind numbing and confusing programs designed to help out taxpayers….?

    Its ridiculous…i just received a job offer that has a fsa option and I have no clue if it would make sense or not for m family to enroll.

  5. I joined for the first time this year through my school system. I find it easy to use and whenever I am asked for a receipt-I can scan it and fax it.
    No problem. I plan to do this again next year. Love it.

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