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.
It’s not a scam, it’s just a pain in the ass. If you use it right, you end up saving money.
If you’re interested in taking advantage of one but skeptical, try funding it with only the amount you can roll over and then you won’t lose any at the end of the year. My FSA (FSA feds, the one in the video) has an app that you use to take pictures of receipts to get reimbursed.
I think the real use case for FSAs is people who have regular or predictable health care costs. If you know that, every month, you need $500 for insulin, or every year you have two $200 dentist visits that aren’t covered by insurance, then paying those expenses with pre-tax money can be a big savings - saves federal tax, payroll tax, and state tax. If you’re a young, healthy person whose biggest health expense is hangover advil, then FSA is not for you.
The vlogger’s problem is he was putting money into the FSA “just in case,” and got screwed because he didn’t have need. I’m sure there are tons of HR departments out there that do a terrible job of explaining the use-it-or-lose-it nature of FSAs, so it’s valuable to have the rant out there, but they are good accounts for the people that benefit.
Well I have a kid and a wife. I don’t have “regular” healthcare costs but I know damn well we’ll be shelling out some bucks on sunscreen, bandaids, ibuprofen and Tylenol, contacts and solution, etc etc. Sometimes we’ll budget more of we know we’ll need new glasses or something. I mean, yeah, it’s a guessing game, but that you can roll over $610 you don’t have to nail it to the penny. Totally worth the few hundred dollars we’re saving in taxes.
