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Flexible Spending Woes

Posted by: Diane Brady on December 19, 2007

Flexible spending accounts are supposed to be perks that make it easy for employees to set aside money, on a pre-tax basis, for healthcare, commuting or dependent care costs. But a personal experience in recent weeks demonstrates some of the perils of the process.

Our company relies on WageWorks to manage the process. WageWorks saw revenue grow 2,714% from 2002 to 2006 as more companies used its services to manage these benefits for employees.

My situation seemed so simple. I put in receipts for dental care and was issued a $140 check in early October. It never arrived. So I called customer service and was told twice that the check would be reissued. It was not. Then I called again and was told that the check had been reissued and “cashed” on Nov. 12. I called again, and was told that it had been put in my bank account. My bank had no record of any such check in my account—and neither did I. WageWorks sent me a record of a different check (for a different amount and for a different purpose) that was deposited in the account.

After more calls and e-mails, the customer service folks confirmed that it had not in fact been cashed. A reissued check was allegedly on the way. I told the agent to hold off on issuing yet another check until we could discover what had happened to the second one.

A reissued check finally arrived and I immediately called to let them know. I deposited it in my bank account. About a week later, another $140 check arrived in my mailbox and I contacted them to say that it had been sent in error. All seemed well. Then WageWorks rejected the second check and I was charged a $25 bounced-check fee by my bank.

One frustrating aspect of this was the knowledge that I was trying to get access to my own money, set aside from my pay check. Such confusion can arise in any billing situation, of course, but it does make me more hesitant to use this “perk” again.

Reader Comments

Thomas H

December 22, 2007 12:46 PM

It's incredible that there isn't "someone" who can could have taken the ball and go the full distance to make sure your problem gets resolved. No one is accountable, much as the problem with committees. But when you pay people low wages, you don't expect them to know the entire process -- just their small task. Diane, I would email a VP (even the CEO) of WageWorks, explain your case, and see what happens. The most expedient way would be to link to this blog, but that would be unfair! I'm curious how it'll turn out. Thomas H.

j clemonds

December 27, 2007 9:29 AM

I have had similar problems with a company named TRION, and your last paragraph says it all. ultimately I end up saving around $250 annualy by choosing to take advantage of this service for dependant daycare, but when I spent over a month trying to get $500 from the account, and all the while double dipping to cover my daycare expense, I began to wonder if the savings is worth the agrivation.
I have now been with three companies, Aflac, Trion and United Health Care, and all I can say is that all companies providing this service are not created equal. Aflac and U.H.C. seem to have their processes streamlined to expediate the transaction, with the ability for the user to track the transaction, via the internet, and telephone, all the way through the process. This is offers peice of mind, consideing that even though these companies process thousands of claims a day, I can stay in the loop regarding the status of my claim.


December 27, 2007 11:26 AM

I have one of those debit cards specifically for FSA. Sound like a great idea at first, bypassing the reimburesement processes, just charge copay and stuff to the card. Then I learned that my card gets denied more often than approved when I try to use it, even in places like regular doctor offices and pharmacy (the pharmacist's counter, not the front checkout). Talk about humililation of having your $20 'credit card' transaction declined (it surely looks that ways to bystanders)...

Mike H.

December 27, 2007 12:01 PM


My recommendation would be to take advantage of direct deposit! More than likely you'd see the money in your account in days.



December 27, 2007 1:31 PM

I agree I tried using a FSA this past year and it was such a pain to get pain and the extra paperwork required was monumental. I tried calling a couple of times that I had questions and only one of those times I got someone who I could understand. I will NEVER us a FSA again. I ended up losing over $1200 that I couldn't spend because of the paperwork backlog and everytime the paper work was in error the account was frozen. Now because of all the frozen time I was not able to spend MY money before the end of the year cycle and I lost my money. I feel like I have be cheated and robbed

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