Mixing TriCare with Civilian Health Benefits

A loyal GubMints reader writes:

I’m currently serving in the National Guard.

I use TRS as our only insurance for myself and my family.  I serve in the Air National Guard, but I have an FSA available through my civilian employer.  I was wondering if I can contribute to and use an FSA to pay for my TRS premium, and any other health care related expenses?  

Can you contribute to either a Health Savings Account or Health Care Flexible Spending Account with your company while your primary insurance is Tricare Reserve Select?

I believe the answer is no to the HSA, and yes to a FSA, but I am having a hard time clarifying that research. 

Thanks!

Thanks for your service, and thanks for reading!

For my answer, I am assuming you and your dependents are all on the same medical plan and you are not split between your self ‘solo’ on TriCare with your dependents enrolled on another health plan.

With regards to the HSA, the answer is a straight up ‘No’.

TriCare is not a High Deductible Health Plan (HDHP), and you must be enrolled in an HDHP to be eligible to participate in a Health Savings Account (HSA).

As for the FSA, you can setup an FSA only if your employer accommodates it via payroll deductions.  I’m not aware of DFAS facilitating FSAs for anyone, Guard/Reserves included.

You can, however, use a civilian employer-provided Medical FSA benefit (as provided by either you or your spouse’s employer) to pay for most medical-related out-of-pocket expenses (i.e. copays and deductibles).   You CANNOT use your FSA to pay insurance premiums– Including TriCare premiums.   The rules on what is allowable as a Medical FSA expense change a bit from year to year, so make sure you’re up to speed on this year’s IRS Publication 502 rules.

Bottom Line – If you know what you will be paying out-of-pocket for TriCare Copays and deductibles over a 12 month period, then type this ‘Annual FSA election’ in to your civilian-employer-provided FSA benefit request form during your civilian employers’ Open Season.   Note that FSA money is ‘use or lose’ and turns in to a ‘pumpkin’ if you don’t use it up by the end of the 12-month FSA plan year).

Also Note:  For those who do not have a civilian employer-provided FSA benefit, there still is technically a way to deduct medical expenses.  You CAN deduct your out-of-pocket medical expenses, but only if you itemize deductions on your tax return, and only once they go above and beyond 10% of your AGI.  More info is here :  Can I Claim Medical Expenses on My Taxes?