Starting in 2025, active-duty service members will have access to a new benefit: healthcare flexible spending accounts (FSAs). This initiative allows troops to set aside pretax earnings to cover eligible out-of-pocket healthcare expenses, providing significant savings.
Enrollment for this program will open during a special period in March 2025.
With a healthcare FSA, service members can contribute between $100 and $3,200 annually. Funds are deducted automatically from paychecks and can be used for IRS-approved expenses such as copays, deductibles, prescription drugs, glasses, contact lenses, braces, and wellness treatments like acupuncture and chiropractic care. Items like hand sanitizer and menstrual care products are also eligible. Participants can save approximately 30% on healthcare costs, as contributions are exempt from payroll taxes.
Unused funds must be claimed by December 31 of the plan year, though up to $640 can be carried over if the account is re-enrolled. Service members must submit receipts or documentation for reimbursement and can enroll at fsafeds.gov once the enrollment period begins.
The FSA benefit is also available to certain Reserve members on active duty. Additionally, the program is administered by FSAFEDS, which also oversees the Defense Department’s dependent care flexible spending accounts introduced in 2024.
Service members can consult DOD’s Office of Financial Readiness or Military OneSource for guidance.
Peoplesmind
