alt Hacker NewsAn FSA should not be a "bet" it should be set up for expenses you know you are going to need to pay: dependent care, recurring care and prescriptions, planned procedures. Your employer, not you, owns the account and keeps any balance remaining at the end of the year so you should not really guess at how much you contribute. An advantage of the FSA is that the full contribution is available immediately but the payroll deductions are spread over the whole year.
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But for a ton of people that amount is extremely variable. Do you plan on getting into a car accident? Do you plan on getting an appendectomy in June when making your elections the November before? Sorry doctor, getting cancer wasn't in the plans for 2026, can we reschedule that to 2027 after my open enrollment?
I hate FSAs. Anyone have a good argument on why we should have them instead of just making HSAs open to everyone regardless of healthcare plan?
Those things are less static than you seem to believe. Eg recurring prescriptions; at least once a year my insurance gets mad about my scripts and requires a pre authorization that occasionally contains a stipulation that I try their “preferred” (read: cheaper for them) alternatives.
My planning is now wrong. Likewise I can only do FSA for planned procedures if I know close to a year ahead of time, which isn’t super likely. What portion of procedures are serious enough that insurance won’t call them elective, but also tame enough that you can put it off for a year for your FSA?
I don’t think I’ve ever had my FSA be completely correct. I’m always either over-stocked and losing money, or under-stocked and paying with post-tax dollars when I don’t have to.