FEBRUARY 28, 2025 – Enrollment for the new Health Care Flexible Spending Account benefit runs from March 3-31, 2025. Service members can sign up and put as much as $3,300 in pretax earnings into an account each year, which can be spent on qualifying health care expenses.
“A Health Care Flexible Spending Account is an optional benefit that enables service members and their families to use pretax earnings to pay for eligible health, dental and vision care expenses,” said Ronald T. Garner, the assistant director of military compensation policy within the Defense Department.
Garner said that married service members who are both eligible for an HCFSA can maintain two separate accounts and contribute as much as $6,600 each year.
Component service members, reservists and National Guardsmen on Active Guard Reserve duty and members of the U.S. Coast Guard Reserve on active duty for more than 180 days are all eligible to participate.
The HCFSA is already available to federal civilian employees and to many in the private sector, but it’s only now available to service members. Garner said it’s something the department has been working on for a while. TRICARE, he said, is an extensive program, but can’t cover everything, and in some cases, an HCFSA may help.
“No health care, no health insurance program is going to cover every cost, and many costs are unforeseeable,” he said. “For instance, if your child gets sick in the middle of the night, you’re not going to wait until you can go see a doctor to get some cold medicine. You’re going to run down to the local pharmacy and grab some cold medicine and bring it back so that you can take care of your child. That’s a cost that will be covered by the HCFSA.”
Eligible service members should look closely at their own financial situation and how much they expect to spend each year on health care expenses before deciding to contribute, he said, adding that some service members are more likely to benefit from an HCFSA than others.
“I would say that, in my experience, this is going to be really valuable to military families,” he said. “For example, I think that there’s going to be a lot of value to those who have family members who are part of the Exceptional Family Member Program. I think those families tend to incur a lot of expenses and often unforeseen expenses that others do not. I think a program like this is going to be particularly beneficial to that group of service members and their families.”
Typically, enrollment in programs like an HCFSA occurs only during Federal Benefits Open Season, which runs from mid-November through mid-December. With the announcement of the new HCFSA benefit for service members, a special enrollment period is available from March 3-31, 2025.
At other times of the year, Garner said, an array of qualifying life events will also allow service members who are not already signed up for an HCFSA to enroll outside the typical open season. Some of those life-changing events include deployment, a permanent change of station, marriage, or the birth of a child, he said.
According to DOD’s “2023 Demographics Profile of the Military Community,” about 46.7% of service members are married, and about 36.7% of service members have dependent children. For those members, making sure their families are taken care of and that their financial situation is squared away is something that contributes to military readiness, said Garner.
“When families are more financially secure, the force is more ready and more lethal,” he said. “When service members are having to worry less about the welfare of their families and their financial welfare, they are more focused on the mission. And I think that can only benefit the organization.”
Use of an HCFSA, for some service members, lowers overall taxable income, putting more money in their pockets to spend in other areas, Garner said. And that means those military families will be more confident that they are taken care of.
“These men and women have given parts of their lives to serve their country and to serve their fellow citizens, and I think that certainly deserves recognition,” Garner said. “We become better when we care about the welfare of our service members, not only because of its impact on the mission, but because of its impact on the nation and on those service members and their families.”
Before enrolling in the HCFSA, service members should talk with a military tax expert, DOD personal financial manager, or personal financial counselor to learn how to take advantage of the account and how it will benefit them. These services are available at no cost to service members.
By C. Todd Lopez, DOD News