Using FSA with TRICARE
Your Employment Questions Answered: Can I Use FSA with TRICARE ?
Sometimes the best way to learn something new is by seeking advice from those who have been there. Asking questions is how we learn about new resources or can give us perspectives that we might never have thought about before. When you ask a question, you can gain the knowledge you are looking for that will help you figure out what you need to know to move forward, whatever the subject might be.
If you are a military dependent you are most likely using TRICARE. You also might be wondering what that means when it comes to the benefits you have at your own job. This question is all about FSA and being able to use it when you also have TRICARE.
Question: Can you still get FSA if you have TRICARE?
I am a military dependent and we use TRICARE for my health insurance. My employer, who is not associated with the government, offers an FSA (Flexible Spending Account) and I can use it for childcare. This would really help my family. My understanding is that I’m not eligible for this while I am using TRICARE. Is that correct? I would really like to be able to use this.
The good news is that you can have TRICARE as your medical insurance and still use your FSA. Dependent Care FSA is independent of health FSA. And, FSA has nothing to do with your health insurance.
You contribute to your FSA out of your pre-tax income, which then lowers your income and payroll taxes. This is a great benefit to be able to use.
It is important to note that FSAs and HSAs are not the same. First of all, with HSA’s (Health Savings Accounts) you have to be on an HDHP (High Deductible Health Plan). TRICARE is not an HDHP.
You can use a civilian employer-provided Medical FSA benefit to pay for most medical-related out-of-pocket expenses such as copays and deductibles. You couldn’t use the FSA to pay insurance premiums, including TRICARE ones.
This is a great article on FSAs by Military OneSource. There are actually two types of FSAs, Medical, and Dependent Care (DCFSA). DCFSA is what you are asking about. You can use it for children under the age of 13 for before and after school care, babysitting and nanny expenses, daycare, nursery school and preschool, and summer day camp. You can also use DCFSA for children who are physically or mentally incapable of self-care, and sometimes elder care.
FSA Maximum Contribution Limits
Remember too, when it comes to FSAs, there is a maximum contribution limit and that changes each year. The maximum amount for 2022 for an FSA is $2,850. You typically do have to spend all of the money that you have saved before the end of the year or the funds will be lost. The IRS does however allow employers to opt-in to carry over up to $570 into the next year. Talk to HR about if your company does this.
For a DCFSA, the limit is usually $5,000 but in 2021, it was increased to $10,500. For 2022, it is back to $5,000.
It’s important to keep updated on the regulations surrounding FSAs and what you can use them for but, yes, you can use them with TRICARE. Many people do.