These US healthcare systems are effectively scams. Yes in theory they can save you money, however in theory there is no difference between theory and practice, while in practice there is.
Of course it’s a scam. “We’ll keep your money for ourselves and never give it back if you don’t spend it this calendar year”? Get the fuck out of here! That’s not to mention the hurdles they make you jump through every time you actually use it, having to upload or mail receipts, fill out forms, etc…
I’ve only been at two jobs that offered an FSA but both had resources explaining clearly that it is use it or lose it. And my personal risk aversion is why I chose an HSA instead. But it seems like a good idea for people to be able to save money by saying “This isn’t really income, since I am confident it’s only going to a demonstratable health expense. So don’t tax me on it.” It’s like a business expense can be tax deductible, and you are in the business of living. But then you don’t get to take home extra money for being under budget. When used correctly, it’s a tool to drive down living expenses and is more efficient for lower incomes since it uses a flat max annual deduction.
I don’t want to victim blame people that lose money by overcommitting, but it’s not like this is in fine print. You can get short articles that explain it in simple terms just by googling “fsa” before committing thousands of dollars to something. If you don’t have much idea what your minimum spending on healthcare will be, just keep it as income for full freedom or use a different tax-advantaged option. It’s just meant to be an option for people with good awareness of budgetting to save some money.
It works incredibly well for my family. We can put $3,200 in the FSA next year and not get taxed on it as well as spend the money tax free. You can buy cold medicine, advil, go to the dentist, go to the doctor, etc.
Same. I put in $1,500 last year and saved like $450 in taxes. I just elected to put in $2,000 next year. It’s totally worth the few seconds it takes to snap a pic of a receipt in an app to save $450 or more.
Why are your health expenses taxable in the first place?
Don’t fall for “orphan crushing machine” policies.
If you follow the intentionally onerous rules, you might get to spend some of your own money on healthcare without being taxed.
Ask yourself why you had to jump through those hoops in the first place.
These are policies created by bad people to rip off ordinary Americans. Making healthcare appear affordable also deflects calls for universal healthcare like they have in every other developed country.
Basically HSAs are a scam put out by health insurance lobbyists.
