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Comment by frob | Hacker News Reader

On a side note, the author's example is exactly why I have chosen to not use FSAs. Sure, it saves me 20% or so since it's pre-tax money, but is my stress, time, executive function, and sanity all worth that? Plus if I screw up and don't spend the money or file something wrong, I lose it or pay penalties.

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FSAs are really annoying if they don't give you a debit card to use or if the administrator is hostile (making you document every debit card swipe, when the provider is obvious, is hostile.)

If yours is usable and if you want to get the benefits and struggle with the mental overhead (like me), the way I solved it might help. I projected the expenses we were almost certain to have (took about a minute.) Then I put a range on the expenses we'd probably have. That's where I set the FSA withdrawals. There was realistically a 0% chance I was going to lose money with the FSA. If gambling stresses you out, just do a conservative amount and be content with the savings from that.

That was 2022. For 2023, FSA planning was easy because I knew I'd be paying for orthodontics, so I just set it at maximum and spent the whole thing up front in January. I'll probably be back to a lower amount next year. It takes a minute to update the withdrawal in our benefits portal during open enrollment.

I am the same way, after having royally screwed up one year (on a similar employer-provided benefit, not a health FSA). I donated several thousand of my pre-tax dollars to the state of California because I missed a deadline and the funds were use-it-or-lose-it.

The ADHD tax is real, and this article calls out its mechanism exactly, though not by this name.

Same. I’ve learned to accept that discounts through coupon-clipping are not for me.

I have always felt this way about FSAs. They don’t save enough money to feel remotely worth the bureaucracy. Especially because (maybe this is not universal) they don’t carry over year to year like an HSA. So you can actually lose money.

Similarly, my work has two options for commuter benefits. Monthly transit passes or like a $20/mo bike credit. The transit passes process automatically and do not accumulate. The bike credits can in theory accumulate but you need to manually manage these more that, bring receipts, the whole thing. Even though I’m an avid cyclist and spend well more than $20 on my bike related activities every month, the shenanigans around it just make it unusable to me.

In the US, FSAs are legally constructed to only run for the year (1/1 - 12/31). All of the money is available to you on Jan 1; it's not accrued per paycheck.

If you spend everything in your FSA in January and quit your job, the company has to eat the loss.

(IANAL, blah blah blah)

In the case of FSAs, it at least has the effect of moving the benefit to people with larger fixed medical expenses.

I think my strategy diverges somewhat from the norm but this is what I do: instead of trying to perfectly predict annual medical expenses, which is pretty fraught especially in my case, i come up with a conservative estimate using a heuristic. Now this figure is typically half of my previous year's expenses. In this way, i essentially ensure that i utilize the full FSA amount without overcommitting.

To guardrail the process, i've integrated my FSA with a small app I wrote as a hobby project that automatically flags eligible transactions. This largely automates the reimbursement procedure, significantly reducing the overhead of manual management and making sure I don't miss much heh.

And in terms of the risk of forfeiture, this conservative approach coupled with the aforementioned automation has safeguarded me against major losses and kept my exposure low. I think the benefits of FSAs are hard to ignore, but they do necessitate a bit more touch than other expenditure vehicles to be sure.

FSAs are pretty manageable if you only put $200ish in there. Mine somehow gets auto deducted for vision costs, so it manages to get used.

HSAs are a very good tax dodge retirement account, so you should figure them out. Except in California they're supposed to be taxed. Except… HSA providers don't give you the forms you'd need to report HSA investment gains, so it is literally impossible to report them.

But then you are doing the management of it for $50.

I'm not doing anything but checking a box during open enrollment once a year.

I've only taken plans that offered HSA. They have incredible tax free investment potential and they don't require any immediate attention. I'm just automatically buying retirement date low fee funds. If I want to manage it later on I can just swap things out.

This hits home as I sit here submitting FSA receipts tonight.

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