DoD to launch new Health Care Flexible Spending Account (HCFSA) for Military Families
The Department of Defense is launching a Health Care Flexible Spending Account (HCFSA) for service members and their families. This HCFSA is optional and is intended to offer service members a tax-advantaged way to pay for eligible medical expenses that TRICARE may not cover. A “special enrollment period” to opt into the HCFSA will run from March 3 to March 31, 2025.
What is the Health Care Flexible Spending Account (HCFSA)?
The HCFSA is a voluntary benefit that allows service members to set aside pre-tax dollars to cover various out-of-pocket medical expenses. Participants can contribute up to $3,300 annually, reducing their taxable income while increasing flexibility in managing health-related costs.
Unlike insurance, which reimburses or pays for covered medical services, an HCFSA works as a savings account specifically for qualified expenses. Funds are deducted from a participant’s paycheck in equal installments throughout the year and can be used for eligible health care expenses.
Special Enrollment Period
Military service members have a limited opportunity to enroll in the HCFSA during a special enrollment period from March 3 through March 31, 2025.
During this time, eligible participants can choose their annual contribution amount, which must be at least $100 but no more than $3,300. Funds will then be deducted monthly from their paycheck and placed into the account for eligible expenses.
Outside this special enrollment window, service members can only enroll, re-enroll, or disenroll during the annual open season or after experiencing a Qualifying Life Event (QLE). QLEs include events such as the birth or adoption of a child, a change in marital status, a PCS move, or deployment.
When a QLE occurs, service members have 60 days to make changes to their HCFSA.
How Can the HCFSA Be Used?
The HCFSA covers a wide range of medical expenses, including doctor visit co-pays and cost shares, deductibles, dental/orthodontic care, vision care, over-the-counter medications, and even specialty treatments like massage therapy.
Participants can submit claims and receive reimbursements even if they haven’t contributed the full elected amount for the year. Additionally, a portion of unused funds—up to $660—can be carried over to the following year.
It is important to note that HCFSA funds cannot be used to pay health insurance premiums.
Eligibility for Enrollment
To participate in the HCFSA, service members must belong to one of the following categories:
- Active-duty members of the Regular Component of a Uniformed Service
- Reserve Component members of the Army, Marine Corps, Navy, and Air Force performing Active Guard Reserve (AGR) duty
- National Guard members performing Active Guard Reserve (AGR) duty
- Members of the United States Coast Guard Reserve performing active duty for more than 180 days
How to Enroll and Use the HCFSA
Once a service member decides to enroll, they must:
- Visit the FSA website between March 3 – 31 and complete the enrollment process.
- Select their annual contribution amount (between $100 and $3,300).
- Begin making payments—funds are deducted monthly from their paycheck.
- Pay for eligible expenses out of pocket and submit claims for reimbursement via the HCFSA portal by uploading receipts or an Explanation of Benefits (EOB).
- Receive reimbursement for approved claims.
Learn more about the HCFSA enrollment process here.
Additional Resources
Need help navigating the new HCFSA? Here are a few things to get you started:
- Comprehensive Guide for EFMP Families
- Comparison Chart: Dependent Care FSA vs. HCFSA
- HCFSA Frequently Asked Questions
Service members interested in participating should sign up during the special enrollment period between March 3 and March 31, 2025.
Remember: the special enrollment period begins on March 3 and ends on March 31. In the meantime, visit the HCFSA Special Enrollment Page for more information.
