A new benefit for military families! How good is it?

In fall of 2024, SecDef announced a new Healthcare Flexible Spending Account (HCFSA) for military families. In March 2025, you'll be able to sign up for it for the first time. It may give you a minor tax savings but also may complicate your situation a little.

We break down the details of this pre-tax benefit, explaining how it works, who's eligible, and whether it's worth signing up for.

Main topics and questions covered:

• What is the new Healthcare Flexible Spending Account (HCFSA)?
• Who is eligible for the HCFSA?
• What can the HCFSA be used for?
• How much can be contributed to the HCFSA?
• How does the contribution process work?
• What are the tax benefits of the HCFSA?
• Are there any risks or downsides to the HCFSA?
• How does the "use it or lose it" rule apply?
• What are some potential use cases for the HCFSA?
• Is the HCFSA worth signing up for?
• How does the HCFSA compare to other military benefits?
• Where can listeners find more information about the HCFSA?

Links Mentioned:

• FSAfeds HCFSA official page
  • Eligible Expenses List
  • FSAfeds app
  • HCFSA calculator- how much tax savings would it be for you?
• Military One Source's info on HCFSA
• FINRED's benefits page (official of Financial Readiness)

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