A brand new profit coming to service members in 2025 may assist defray their well being care bills, because the navy will quickly supply troops well being care versatile spending accounts, the Protection Division introduced Friday.
Service members could have the choice to open well being care versatile spending accounts for the primary time throughout a particular enrollment interval in March 2025. They will contribute as much as $3,200 a yr in pretax earnings towards eligible out-of-pocket well being care bills, with a minimal contribution of $100 yearly. The Inside Income Service determines eligible bills and contribution limits, the latter of which can range by tax yr.
The profit is certainly one of seven initiatives introduced Friday by Protection Secretary Lloyd Austin to enhance the standard of life for service members and their households.
In essence, it’s a financial savings account that can be utilized to pay for gadgets not coated by well being or dental insurance coverage. Such accounts have been out there for years to workers of many federal businesses and personal firms.
Greater than 300 IRS-approved well being care bills qualify, together with copays and deductibles; out-of-pocket prices for braces; glasses and get in touch with lenses; prescribed drugs; over-the-counter medicines; and wellness therapies corresponding to acupuncture, therapeutic massage and chiropractic care.
All kinds of different gadgets are additionally eligible, corresponding to hand sanitizer and menstrual care merchandise.
Service members select their contribution quantity, which is robotically withdrawn from their paycheck over the course of the yr and deposited into their FSA. As a result of FSA contributions aren’t topic to payroll taxes, contributors can save a mean of 30% on eligible well being care bills, in line with the Federal Versatile Spending Account Program, or FSAFEDS. FSAFEDS, which is able to administer this system, gives a calculator to assist decide potential annual financial savings.
FSAFEDS additionally administers DOD’s dependent care versatile spending account profit, which turned out there to service members in 2024.
Service members should submit receipts or different documentation with their declare kind.
As soon as the enrollment interval begins, service members can enroll on-line at fsafeds.gov. Service members should use and declare their FSA funds by the top of the plan yr on Dec. 31. Service members can carry over as much as $640 of unused funds into the following yr in the event that they reenroll.
In any other case, it’s use or lose: Service members will lose any funds that aren’t used through the plan yr.
If each spouses are eligible for a well being care FSA, every earner can preserve a separate account, and, mixed, can contribute between $200 and $6,400 whole per yr.
The Protection Division gives free help to service members deciding whether or not to make use of this profit, by means of appointments with a private finance or tax counselor by way of DOD’s Workplace of Monetary Readiness and Navy OneSource. Extra info, together with monetary and tax impacts, might be out there on the DOD’s monetary readiness web site at a later date.
In the meantime, troops can begin gathering receipts and details about their out-of-pocket well being bills now to assist resolve whether or not to open a well being care FSA in March and the way a lot to contribute.
Karen has coated navy households, high quality of life and shopper points for Navy Occasions for greater than 30 years, and is co-author of a chapter on media protection of navy households within the guide “A Battle Plan for Supporting Navy Households.” She beforehand labored for newspapers in Guam, Norfolk, Jacksonville, Fla., and Athens, Ga.
