Starting March 3, active-duty service members will have the option to enroll in a new benefit that could help defray their out-of-pocket health care costs.
The special enrollment period for health care flexible spending accounts will run from March 3 through March 31.
In essence, a health care flexible spending account, or FSA, is a savings account that can be used to pay for items not covered by health or dental insurance. Such accounts have been available for years to employees of many federal agencies and private companies.
Service members can contribute any amount between $100 and $3,300 in pretax earnings this year toward eligible out-of-pocket health care expenses. The Internal Revenue Service determines eligible expenses and contribution limits, the latter of which may vary by tax year.
By contributing to FSAs, the taxable income decreases by the contribution amount. Savings average 30% on eligible health care expenses, according to the Federal Flexible Spending Account Program, or FSAFEDS, which administers the FSA program for the Defense Department and other federal agencies.
Savings depend on a variety of factors, including individual and household tax situations.
In an example provided by the Defense Department, if a service member’s annual salary is $50,000 and they contribute $3,300 to a health care FSA and also $5,000 to a dependent care FSA, they will only be taxed on an income of $41,700.
Defense officials began offering service members dependent care FSAs, which help defray the cost of dependent care, in 2024.
If a married service member and their spouse are both eligible to enroll in a health care FSA through their employers and maintain two separate accounts, the household can contribute between $200 and $6,600 per year.
Health care FSAs will be available to members of the active component and reservists performing Active Guard and Reserve duty, including members of the National Guard performing such duty. U.S. Coast Guard reservists, including Reserve component managers, performing active duty for more than 180 days are also eligible.
Although this year’s FSA period covers approximately 10 months, service members can still contribute up to the annual maximum of $3,300 during that period. It’s automatically deducted from each paycheck or accelerated over fewer pay periods and deposited into the service member’s FSA.
Once enrolled, service members have between the date following enrollment and Dec. 31, 2025, to spend their funds. Claims for expenses must be submitted no later than April 30 of the following year. Service members must submit receipts with their claims for reimbursement. They can carry over up to $660 of unused funds into the next year if they reenroll in a health care FSA.
The health care FSA program is not part of Tricare.
More than 300 health care expenses are eligible for reimbursement through the FSA, including co-pays and deductibles; out-of-pocket costs for braces; glasses and contact lenses; prescription drugs; over-the-counter medicines; bandages; and wellness treatments such as acupuncture, massage and chiropractic care. Other expenses, such as condoms, over-the-counter pregnancy tests and menstrual care products, are also eligible.
Service members can enroll online at fsafeds.gov. Here’s how to enroll:
- Select “Qualifying Life Event,” or QLE, from the “Enroll in a Plan” drop-down menu.
- Select the QLE titled “Special Enrollment Period for Members of the Uniformed Services March 3-31.”
- Enter the date of enrollment as the QLE event date.
- Follow the remaining instructions.
The FSA will be activated within a few business days of enrollment. The “election effective date” will be updated to the date of the day after enrollment.
Defense officials advise service members and their spouses to speak with a tax consultant or personal financial manager for an understanding of how the FSA might affect their family’s finances and tax situation. These services are available at no charge to service members and their families through Military OneSource and the Office of Financial Readiness.
Meanwhile, service members can start gathering previous health care expense receipts and pricing items to prepare for the special enrollment period.
After the special enrollment period ends, service members can next enroll in a health care FSA during federal benefits open season between mid-November and mid-December. There are also certain qualifying life circumstances that allow service members to change their elections throughout the calendar year.
Karen has covered military families, quality of life and consumer issues for Military Times for more than 30 years, and is co-author of a chapter on media coverage of military families in the book “A Battle Plan for Supporting Military Families.” She previously worked for newspapers in Guam, Norfolk, Jacksonville, Fla., and Athens, Ga.
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