Matt Breunig on HSA ＆ FSA: The Welfare System Stole $2k From Me
Matt Breunig on HSA ＆ FSA: The Welfare System Stole $2k From Me
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.
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Weird FSA trick tho; if you borrow from an FSA, spend it in full in, say… the first month of the year, quit your job. You never have to pay it back.
Happened to me by accident. I started a plan to pay for LASIK. Got it. Had no way of knowing back then I’d be made another job offer. Took it and expected to get dinged with the entire amount. Nope. FSA plan eats the loss.
So all you gotta do is plan very specifically months ahead and triple down by orchestrating a job change all to save $2k :) easy.
This is an actual FSA ‘loophole’. Easily searchable.
It's the analog to how the industry lobbies to get preferential tax treatments for these accounts. 99% of the time your employer or the insurer keeps money at the end of the year. If you're smart about when you leave your employer though(leave after exhausting your FSA early in the year), or have advance notice of it, you can walk away and beat the game.
What do you mean by "borrow" from an FSA? It's not a credit card, if you spent the money, it was loaded up already.
It sounds like your employer loaded funds on it as part of your benefits, and then you switched jobs.
When you start an FSA the funds are front loaded. You can immediately spend everything. But you pay it back over the course of the year. So if you leave and all the funds are spent - you don’t owe them a repayment and they can’t exactly keep deducting from your paycheck.
I have an FSA with front-loaded funds, you don't have to pay anything back, whether I stay or go from the company.
Maybe your company does it differently.
Maybe so! The one at mine worked like this:
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You elect in advance how much you want to fund your FSA in the next upcoming period (year)
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On day 1 of that period the FSA is available to you to spend on eligible expenses. Within 2 weeks I spent the full years elected amount (one surgery).
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For the duration of the period they deduct (pre-tax) the total FSA election / pay periods (ie. $2000/24 in my case). And that would repeat through the full period (year).
So in my case, leaving after paycheck 1 of that period, but spending 100% of the elected funds means I paid: 1x(2000/24)= $83. But I spent $2000. Upon leaving that meant they did not collect $1917.
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