Service members have until March 31 to obtain a flexible spending account, or FSA, to help defray the cost of medical expenses.
The new health care benefit, initiated last September by then-Defense Secretary Lloyd Austin, allows service members to contribute up to $3,300 in pretax earnings per year to an account that can be used to pay for eligible health care expenses that aren't covered by the military health system or Tricare.
Defense officials said the benefit is likely to help service members with families the most, and especially those enrolled in the Exceptional Family Member Program, as they are more likely to encounter unforeseen medical expenses or needs that aren't covered by Tricare.
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"No health care, no health insurance program is going to cover every cost, and many costs are unforeseeable," Ronald Garner, the Defense Department's assistant director of military compensation policy, said in a news release.
The Internal Revenue Service determines the contribution limits and eligible expenses each year, but they commonly include Tricare deductibles and cost sharing for military families on Tricare Select; over-the-counter medications; medical devices; dental and vision care, including glasses and contact lenses; and non-covered treatments like massage, acupuncture and chiropractic care.
"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," Garner said.
Health care FSAs are common in private industry as well as the federal government, where civilian employees have had access to the benefit for years. In announcing the creation of the benefit for service members, Austin said the efforts would improve quality of life, which in turn helps troops focus on their duties.
"Doing right by our all-volunteer joint force and their families is a core readiness issue. Taking care of our people is fundamental to the department's ability to recruit and retain the most talented American patriots and to ensure that the U.S. military remains the most lethal fighting force on the planet -- and it is simply the right thing to do," Austin said in a Sept. 13 memo.
According to the DoD, dual-service married couples can maintain two separate accounts and contribute as much as $6,600 each year. Reservists, National Guard members on active Guard and reserve duty, and members of the U.S. Coast Guard Reserve on active duty for more than 180 days also are eligible to participate.
The minimum contribution to open an account is $100 per year.
The current enrollment period runs through March 31. Service members who for now choose not to participate can enroll for 2026 during open season, which runs from November through early December, or can enroll during a qualifying life event, such as a move, birth of a child or marriage.
Garner said families need to look closely at their medical expenses to determine whether an FSA would benefit their financial situation. According to the Federal Flexible Spending Account Program, or FSAFEDS, savings average 30% on eligible health care expenses.
In a statement on the Military Officers Association of America website, Karen Ruedisueli, the organization's director of government relations for health affairs, said the accounts can help military families save money because the funds have no employment or federal taxes deducted and they are excluded from gross income when calculating income tax.
"Health care FSAs can also help with budgeting: By contributing to an FSA, military families can set aside funds for anticipated medical costs, which may make managing expenses more predictable," Ruedisueli added.
Troops access their accounts by submitting receipts for expenses to be reimbursed. Funds placed in the accounts must be used by the end of the year. Those who re-enroll for the following year can carry over $660.
To sign up, service members must go to the FSAFEDS website. Accounts typically will be accessible within a few business days of enrolling and the funds available to cover expenses immediately.
According to the DoD, nearly 47% of the service members are married and roughly 37% have children.
"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," Garner said.
Related: Enroll in DoD's New Health Care Flexible Spending Accounts Starting March 3
