Flexible Spending Accounts (DCFSA and HCFSA)

Start Here If You Are New to Flexible Spending Accounts

Flexible Spending Accounts (FSAs) let you set aside pre-tax dollars to pay for qualified dependent care or healthcare expenses. Two types apply to Marines. Dependent Care FSA (DCFSA) up to $5,000 per household for qualified childcare and adult dependent care. Health Care FSA (HCFSA) up to $3,200 for healthcare costs not covered by TRICARE. Pre-tax contributions reduce your federal taxable income. Both administered through FSAFEDS at www.fsafeds.gov. The HCFSA opened to active-duty service members in 2025 with a Special Enrollment Period in March 2025.

This page walks you through FSAs from your seat as a General Marine. By the end you will know.

• DCFSA $5,000 household limit for dependent care
• HCFSA $3,200 limit for healthcare costs
• Pre-tax contribution framework (reduces taxable income)
• FSAFEDS enrollment at www.fsafeds.gov
• Qualified vs. non-qualified expenses
• Use-it-or-lose-it rule and rollover provisions
• Open Season and qualifying life event enrollment

Every fact on this page comes from MARADMIN 573/24MARADMIN 573/24, the FSAFEDS program at www.fsafeds.gov, and Internal Revenue Code Section 125.

Two FSA Types

Dependent Care FSA (DCFSA)

Pre-tax account for qualified dependent care expenses. Childcare for children under 13. Adult care for qualifying dependents (parents, disabled spouse, or other qualifying relative who lives with the Marine). Up to $5,000 per household per year.

Health Care FSA (HCFSA)

Pre-tax account for healthcare expenses not covered by TRICARE. Out-of-pocket medical costs, dental and vision expenses, prescriptions, and qualified medical equipment. Up to $3,200 per Marine per year.

DCFSA Framework

Contribution Limit

Up to $5,000 per household per calendar year. The household cap applies if both spouses are eligible. The limit is set by the IRS and adjusted periodically.

Qualified Expenses

• Daycare or childcare center fees.
• Before-school and after-school care.
• Summer day camp (not overnight camp).
• Babysitter wages (if babysitter declares income).
• Adult day care for qualifying dependents.
• Preschool tuition (the educational portion does not qualify).

Not Qualified for DCFSA

• Overnight camps.
• Tuition for kindergarten and beyond.
• Care provided by the Marine's spouse, the child's other parent, or another dependent.
• Diaper service or food.
• Childcare provided when the Marine is not working or seeking work.

Eligibility Test

The Marine and spouse (if married) must work, look for work, or attend school full-time during the period the dependent care is incurred. This is the "work-related expense" requirement.

HCFSA Framework

Contribution Limit

Up to $3,200 per Marine per calendar year. Set by the IRS.

Qualified Expenses

• Out-of-pocket medical expenses (deductibles, copays, coinsurance).
• Dental costs (orthodontics, crowns, fillings).
• Vision costs (eyeglasses, contact lenses, LASIK).
• Prescription medications.
• Over-the-counter medications and feminine hygiene products (per CARES Act expansion).
• Qualified medical equipment (CPAP supplies, blood glucose monitors, etc.).

Not Qualified for HCFSA

• Cosmetic procedures (unless reconstructive).
• Health club memberships.
• Vitamins and supplements (unless prescribed).
• Insurance premiums.

HCFSA Special Enrollment Period (March 2025)

Per MARADMIN 573/24MARADMIN 573/24 and FSAFEDS, the HCFSA opened to active-duty service members in 2025. A Special Enrollment Period was held in March 2025 outside the standard FSAFEDS Open Season. The Special Enrollment Period gave Marines initial access to the HCFSA before the next Open Season.

Subsequent enrollment is through the standard FSAFEDS Open Season (typically November to December for the following plan year) or through Qualifying Life Events.

How FSAs Work

Pre-Tax Contribution

The Marine elects an annual contribution amount during enrollment. The election is divided into 24 equal pay period deductions for active-duty Marines on the semi-monthly Marine Corps pay schedule.

The deduction is taken from pre-tax income. Pre-tax means the contribution reduces the Marine's federal taxable income, FICA wages, and (in most states) state taxable income.

Reimbursement Process

The Marine pays the qualified expense out of pocket. The Marine submits the receipt to FSAFEDS through the FSAFEDS portal or mobile app. FSAFEDS reimburses the Marine from the FSA balance.

For HCFSA, the Marine receives the full annual election available from day one (uniform coverage rule). For DCFSA, only the funds already deposited are available at any given time.

FSAFEDS Card

Some FSAFEDS plans offer a payment card for qualified expenses. The card draws directly from the FSA balance.

Use-It-or-Lose-It Rule

Per IRS regulations and FSAFEDS terms, FSA funds not used by the end of the plan year are forfeited. The Marine cannot roll the entire balance to the next year.

DCFSA

Use-it-or-lose-it. No rollover. No grace period.

HCFSA

FSAFEDS HCFSA includes a $640 maximum carryover (per IRS limit, periodically adjusted) to the following plan year. Funds above $640 are forfeited if not used.

Planning Tip

Contribute the amount the Marine reasonably expects to spend in qualified expenses. Overestimating leads to forfeited funds. Underestimating misses the tax savings.

Enrollment

FSAFEDS Open Season

FSAFEDS Open Season runs annually from mid-November to mid-December for the following plan year. The Marine elects DCFSA, HCFSA, or both at www.fsafeds.gov.

Qualifying Life Events (QLE)

Outside Open Season, the Marine enrolls or changes contributions only with a qualifying life event.

• Marriage or divorce.
• Birth or adoption of a child.
• Spouse change in employment.
• Change in dependent care provider.
• Significant cost change in dependent care.

The Marine submits the QLE through FSAFEDS within 60 days.

Annual Re-Enrollment

DCFSA and HCFSA do NOT auto-renew. The Marine elects each year during Open Season.

DCFSA vs. Other Tax Benefits

DCFSA vs. Child and Dependent Care Tax Credit

The Marine cannot claim the Child and Dependent Care Tax Credit on the same expenses paid through DCFSA. The Marine evaluates which provides the greater tax benefit based on income and number of dependents.

For higher earners, DCFSA typically provides greater tax savings. For lower earners, the tax credit may be more valuable. Tax software or a tax advisor helps the Marine compare.

DCFSA Coordination With Spouse

Married couples cannot both elect $5,000 to DCFSA. The combined household cap is $5,000.

DTS and Pay Coordination

DCFSA and HCFSA contributions appear on the LES (Leave and Earnings Statement) as pre-tax deductions. The deductions reduce.

• Federal taxable wages.
• FICA taxable wages.
• Most state taxable wages.

The Marine reviews the LES after enrollment to verify the pre-tax deduction is processing correctly.

Common Questions Marines Ask

What is the difference between DCFSA and HCFSA?

DCFSA covers dependent care (childcare, adult care). HCFSA covers healthcare costs not covered by TRICARE (deductibles, dental, vision, prescriptions). Different limits ($5,000 vs. $3,200).

How do I enroll?

Through FSAFEDS at www.fsafeds.gov. Open Season runs mid-November to mid-December for the following year. Qualifying Life Events permit mid-year enrollment within 60 days.

Does the HCFSA apply to active-duty Marines?

Yes. Active-duty Marines gained access to HCFSA in 2025 with a Special Enrollment Period in March 2025. Standard enrollment is through Open Season or QLE.

What happens if I do not use all my FSA funds?

DCFSA funds not used by year-end are forfeited (use-it-or-lose-it). HCFSA carries up to $640 to the next year per IRS limit. Plan contributions to match expected spending.

Can I use DCFSA for summer camp?

Day camp yes. Overnight camp no.

Can I use HCFSA for over-the-counter medications?

Yes. Per the CARES Act expansion, OTC medications and feminine hygiene products qualify without a prescription.

Can I use DCFSA if my spouse stays home?

No. The DCFSA work-related expense rule requires both spouses to work, look for work, or attend school full-time during the period the dependent care is incurred.

How does the FSAFEDS card work?

Some plans offer a payment card. The card draws directly from the FSA balance for qualified expenses. The Marine may need to provide receipts for substantiation.

Where to Go for Help

Routing by Issue

• FSA enrollment. The FSAFEDS portal at www.fsafeds.gov.
• FSAFEDS support. Phone 1-877-372-3337 (TTY 1-800-952-0450).
• Qualifying Life Event submission. Through FSAFEDS within 60 days of the event.
• DCFSA receipt submission. Through the FSAFEDS portal or mobile app.
• HCFSA receipt submission. Through the FSAFEDS portal or mobile app.
• DFAS Marine Corps Pay direct contact. Phone 1-888-332-7411 (DSN 312-571-9450 from overseas).

Where to Go Next on This Site

• Pay and Entitlements landing page lists all the pay topics.
• Federal Tax Withholding covers W-4 and tax framework.
• TSP and Savings covers retirement savings contributions.
• Allotments covers automatic pay deductions.
• Priority of Pay Deductions covers the LES deduction order.

Related Roles

• Leaders coach Marines on FSA elections during Open Season and the use-it-or-lose-it planning framework.
• Admin at S-1 supports questions about FSAFEDS deductions appearing on the LES.
• Commanders verify Marines have access to FSAFEDS information and Open Season notices.

Flexible Spending Accounts let Marines pay qualified dependent care and healthcare expenses with pre-tax dollars. DCFSA up to $5,000 per household. HCFSA up to $3,200 per Marine. Enroll at www.fsafeds.gov during Open Season or with a Qualifying Life Event. Use-it-or-lose-it rule applies. HCFSA opened to active-duty Marines in 2025 per MARADMIN 573/24MARADMIN 573/24.