Direct primary care plans now qualify for HSA use

Revolutionary healthcare coordination eliminates prior disqualification barriers

The One Big Beautiful Bill Act delivers groundbreaking relief for healthcare consumers by eliminating the longstanding prohibition against combining Direct Primary Care arrangements with Health savings accounts. Starting January 2026, individuals enrolled in qualifying DPC memberships can contribute to HSAs without losing their tax-advantaged status.

This historic change removes a significant barrier that previously forced Americans to choose between convenient, affordable primary care access and valuable tax-deferred healthcare savings opportunities. The legislation recognizes Direct Primary Care as a complementary healthcare service rather than disqualifying insurance coverage.

The new rules establish clear fee limits and coverage boundaries for qualifying DPC arrangements, ensuring consumers understand which services count toward HSA eligibility and which might create complications. Monthly fees of $150 for individuals or $300 for families represent the maximum amounts that maintain HSA qualification under the new legislation.

These changes take effect for months beginning after December 31, 2025, giving healthcare providers and consumers adequate time to adjust their arrangements. The coordination between DPC memberships and HSA eligibility creates unprecedented opportunities for comprehensive, tax-efficient healthcare planning.

Understanding Direct Primary Care arrangement structures

Direct Primary Care is a healthcare delivery model in which patients pay fixed monthly fees directly to primary care providers for comprehensive services, without involving traditional insurance billing. These arrangements typically cover unlimited office visits, basic lab tests, care coordination, and direct provider communication, with no copays or deductibles.

Key characteristics of qualifying DPC arrangements include:

• Fixed monthly membership fees paid directly to providers
• Comprehensive primary care access without visit limitations
• No third-party insurance billing for covered services
• Direct communication access to providers via phone, email, or secure messaging
• Coordination of specialty care and outside services when needed

The One Big Beautiful Bill Act establishes specific parameters for DPC arrangements that maintain HSA eligibility, creating clear boundaries between qualifying primary care services and excluded healthcare coverage that would disqualify HSA contributions.

Fee structures under the legislation limit individual memberships to $150 per month and family memberships to $300 per month, with inflation adjustments beginning in 2026. These limits ensure DPC arrangements remain affordable while preventing arrangements structured primarily to circumvent HSA eligibility rules.

DPC providers typically offer services including routine check-ups, chronic disease management, acute illness treatment, basic diagnostic testing, care coordination, and medication management. The direct payment structure eliminates insurance paperwork and administrative overhead, allowing providers to spend more time with patients.

Fee limits and inflation adjustments preserve affordability

The One Big Beautiful Bill Act establishes maximum monthly fees for qualifying Direct Primary Care arrangements that maintain Health savings account eligibility, ensuring these healthcare models remain accessible to moderate-income families while providing clear compliance guidelines.

Maximum monthly DPC fees under the legislation:

• Individual coverage: $150 per month maximum
• Family coverage: $300 per month maximum
• Annual cost limits: $1,800 individual, $3,600 family
• Inflation adjustments: Begin in 2026 using the chained CPI methodology
• Future fee increases: Rounded to the nearest $5 increment

Example fee calculation for a family of four:

• Monthly DPC membership: $300
• Annual DPC costs: $300 × 12 months = $3,600
• HSA contribution room (2026): $8,550 for family coverage
• Combined tax advantage: DPC fees are deductible as medical expenses
• Total healthcare tax benefits: $12,150 maximum annual value

These fee limits ensure Direct Primary Care remains affordable while preventing arrangements that function more like traditional insurance coverage. The inflation adjustments preserve purchasing power over time, unlike previous healthcare provisions that remained static for decades.

Families spending less than the maximum monthly amounts can allocate remaining healthcare dollars to Health savings account contributions, creating comprehensive tax-advantaged healthcare strategies that address both routine primary care access and unexpected medical expenses.

Services excluded from qualifying DPC arrangements

The One Big Beautiful Bill Act establishes clear boundaries defining which services Direct Primary Care arrangements can provide while maintaining Health savings account eligibility, preventing arrangements that function as prohibited insurance coverage.

Services explicitly excluded from DPC arrangements:

• Procedures requiring general anesthesia or sedation
• Prescription medications, except vaccines administered in the office
• Laboratory services are not typically performed in primary care settings
• Advanced imaging beyond basic in-office diagnostics
• Specialty care provided outside the primary care scope

These exclusions ensure that DPC arrangements focus on primary care services rather than comprehensive insurance coverage, which would disqualify HSA contributions. Patients requiring excluded services must obtain them through their high-deductible health plan or pay out of pocket.

Permissible services under qualifying DPC arrangements:

• Office visits for acute and chronic conditions
• Basic preventive care screenings and immunizations
• Minor office procedures, including wound care and suturing
• Electrocardiograms and similar in-office diagnostics
• Basic laboratory tests are commonly performed in primary care settings
• Care coordination and referral management

The legislation requires the IRS and HHS to issue implementing regulations clarifying specific service categories and compliance requirements within 180 days of enactment. These regulations will provide detailed guidance on borderline services and enforcement mechanisms.

Providers offering services beyond the permitted scope must clearly separate those charges from the monthly DPC membership fee to maintain HSA eligibility for their patients. Bundling prohibited services with DPC fees would render the entire arrangement ineligible.

Tax treatment of DPC fees maximizes healthcare savings

Direct Primary Care fees receive favorable tax treatment under the One Big Beautiful Bill Act, qualifying as medical expenses eligible for Health savings account reimbursement, Health reimbursement arrangement payment, and itemized medical expense deductions.

Tax treatment options for DPC fees:

• HSA reimbursement: Pay fees tax-free from Health savings accounts
• HRA coordination: Employer-sponsored arrangements can cover DPC costs
• Itemized deductions: Include fees in medical expense calculations exceeding the 7.5% AGI threshold
• Pre-tax payment: Employers can offer DPC as a tax-free benefit
• FSA coordination: Some flexible spending arrangements may cover fees

Example tax savings calculation for an individual with DPC:

• Annual DPC fees: $1,800 (individual coverage)
• Paid from HSA: Tax-free distribution
• Marginal tax rate: 24% federal
• State tax rate: 5%
• Combined tax savings: $1,800 × 29% = $522 annually

This tax treatment creates powerful incentives for utilizing Direct Primary Care arrangements alongside high-deductible health plans and Health savings accounts. The coordination enables tax-free payment of routine primary care expenses while preserving HSA funds for significant medical costs.

Employers offering DPC memberships as workplace benefits can deduct the full cost as ordinary business expenses while providing tax-free value to employees. This creates opportunities for innovative benefit packages that reduce overall healthcare costs while improving employee satisfaction.

The combination of DPC affordability and HSA tax advantages enables families to build substantial healthcare emergency funds while maintaining access to excellent primary care. This dual approach addresses both routine healthcare needs and protection against catastrophic expenses.

Coordination with high-deductible health plans optimizes coverage

Direct Primary Care arrangements work most effectively when coordinated with high-deductible health plans, creating comprehensive coverage that addresses both routine primary care access and protection against major medical expenses. The One Big Beautiful Bill Act ensures this coordination maintains HSA eligibility.

Optimal HDHP and DPC coordination strategy:

• HDHP coverage: Major medical expenses, hospitalization, specialty care
• DPC membership: Routine primary care, chronic disease management, acute illness
• HSA contributions: Maximum allowable amounts for long-term savings
• Combined deductibles: HDHP deductible applies to services beyond DPC scope
• Total cost management: Predictable DPC fees plus catastrophic protection

Example family healthcare cost structure:

• HDHP monthly premium: $600 (family coverage)
• HDHP annual deductible: $6,000
• DPC monthly membership: $300 (family coverage)
• Combined monthly cost: $900 for comprehensive coverage
• HSA contribution: $8,550 annually (2026 family limit)
• Net healthcare costs: Reduced through tax-advantaged savings

This coordination provides families with unlimited access to primary care through DPC, while maintaining catastrophic coverage through the HDHP. The combination eliminates copays for routine visits while preserving HSA contribution eligibility.

Many families find this approach reduces overall healthcare costs compared to traditional insurance plans with copays and coinsurance. The predictable DPC fee eliminates surprise costs for routine care, while the HDHP provides necessary protection against major medical expenses.

Enhanced Health savings account contribution limits under the One Big Beautiful Bill Act further improve this strategy, allowing moderate-income families to contribute up to $8,550 annually beyond standard limits.

Enhanced HSA contribution limits multiply DPC benefits

The One Big Beautiful Bill Act dramatically increases HSA contribution limits for moderate-income taxpayers, creating powerful synergies with Direct Primary Care arrangements. These enhanced limits enable families to maximize tax-advantaged healthcare savings while accessing comprehensive primary care.

Enhanced HSA contribution opportunities:

• Base family limit (2026): $8,550 annually
• Enhanced contribution addition: $8,550 for qualifying families
• Total potential contribution: $17,100 for eligible families
• Catch-up contributions: Additional $1,000 for ages 55+
• Income phase-out: Begins at $150,000 AGI for married couples

Example enhanced contribution calculation:

• Family AGI: $140,000
• Enhanced contribution eligibility: Full $8,550 additional amount
• Base HSA contribution: $8,550
• Enhanced contribution: $8,550
• Catch-up contribution (one spouse): $1,000
• Total annual HSA contribution: $18,100
• Tax savings at 24% rate: $4,344 annually

These enhanced limits enable families to fully fund their Health savings account while covering DPC membership costs, creating comprehensive healthcare strategies that address both immediate access needs and long-term savings goals.

The combination of DPC affordability and enhanced HSA contributions enables moderate-income families to build substantial healthcare reserves quickly. Annual contributions of $20,000 or more create significant emergency funds while providing immediate tax benefits.

Strategic families can coordinate DPC memberships with Traditional 401k contributions and Child & dependent tax credits to maximize overall tax efficiency while building long-term wealth.

Bronze plan HSA eligibility expands coverage options

The One Big Beautiful Bill Act extends HSA eligibility to bronze and catastrophic health plans purchased through ACA exchanges, creating additional opportunities to coordinate affordable insurance coverage with Direct Primary Care arrangements and tax-advantaged savings.

Bronze plan HSA eligibility benefits:

• Lower monthly premiums: Typically 20-30% less than silver plans
• HSA contribution eligibility: Full contribution limits apply
• DPC coordination: Combine with primary care memberships
• Comprehensive coverage: Major medical protection plus routine care access
• Enhanced affordability: Lower premiums fund HSA contributions

Example bronze plan and DPC coordination:

• Bronze plan monthly premium: $450 (family)
• DPC monthly membership: $300 (family)
• Combined monthly cost: $750
• Premium savings versus silver plan: $200 monthly
• Additional HSA funding: $2,400 annually from premium savings
• Total healthcare cost reduction: Substantial tax and premium savings

Bronze plans typically cover 60% of healthcare costs, but have higher deductibles than silver plans. However, when coordinated with DPC memberships, families gain excellent access to primary care while maintaining catastrophic protection and HSA eligibility.

The combination of bronze plan affordability, DPC primary care access, and HSA tax advantages creates powerful healthcare strategies for moderate-income families. This three-part approach addresses routine care needs, catastrophic expense protection, and long-term savings simultaneously.

Families transitioning from traditional insurance to this coordinated approach often discover that total healthcare costs decrease substantially while care quality and provider access improve. The predictability of DPC fees, combined with lower bronze plan premiums, creates manageable monthly budgets.

Employer-sponsored DPC arrangements reduce business costs

Employers can offer Direct Primary Care memberships as tax-advantaged workplace benefits, reducing overall healthcare costs while providing valuable benefits to employees. The One Big Beautiful Bill Act ensures these arrangements coordinate properly with employee HSA eligibility.

Employer DPC benefit strategies:

• Direct payment: Employers pay DPC fees as tax-free benefits
• Cost-sharing: Split DPC costs between employer and employee
• Voluntary programs: Offer DPC as an optional benefit
• HDHP coordination: Pair DPC with high-deductible health plan offerings
• Wellness integration: Include DPC in comprehensive wellness programs

Tax advantages for employers:

• Full deduction: DPC fees are deductible as ordinary business expenses
• Payroll tax exemption: No Social Security or Medicare taxes on benefit value
• Reduced insurance costs: Lower overall medical plan expenses
• Improved employee health: Better primary care access reduces absenteeism
• Enhanced recruitment: An Attractive benefits package differentiates the employer

Example employer cost analysis:

• Traditional health plan cost per employee: $8,000 annually
• DPC membership cost: $1,800 per employee
• High-deductible plan with DPC: $5,500 annually
• Employer savings per employee: $2,500
• Employee satisfaction: Improved through better care access
• Total business benefit: Reduced costs plus improved productivity

Employers implementing DPC programs often discover dramatic improvements in employee satisfaction and health outcomes. Unlimited primary care access enables early intervention for health issues, reducing costly emergency room visits and hospitalizations.

Businesses can coordinate DPC offerings with Health reimbursement arrangement benefits and Traditional 401k plans to create comprehensive benefit packages that maximize employee value while minimizing employer costs.

FSA and HRA coordination maximizes medical benefit value

Direct Primary Care fees can be coordinated with employer-sponsored flexible spending accounts and health reimbursement arrangements, creating a layered healthcare benefits structure that maximizes tax advantages while ensuring comprehensive coverage.

FSA coordination strategies:

• DPC fee reimbursement: Pay monthly fees from flexible spending accounts
• Dependent care FSA: Cover children's DPC memberships
• Limited-purpose FSA: Coordinate with HSA eligibility
• Grace period utilization: Maximize FSA value with DPC payments
• Dependent FSA optimization: Family member coverage strategies

HRA coordination opportunities:

• Qualified Small Employer HRA: Reimburse DPC fees tax-free
• Individual Coverage HRA: Combine with ACA marketplace plans
• Excepted Benefit HRA: Cover DPC costs without affecting other coverage
• Integrated HRA: Coordinate with group health plan coverage
• Post-deductible HRA: Stack benefits for maximum value

The One Big Beautiful Bill Act enables HSA contributions even when spouses maintain separate flexible spending accounts, provided the FSA doesn't reimburse the HSA owner's medical expenses. This creates opportunities for strategic benefit coordination within families.

Example multi-benefit coordination:

• Employee HSA contribution: $8,550 annually
• Employer HRA contribution: $2,400 annually
• DPC membership paid from HRA: $1,800 annually
• Remaining HRA funds: Available for other medical expenses
• Total tax-advantaged healthcare funds: $10,950

This layered approach provides families with multiple funding sources for healthcare expenses while maximizing tax advantages. The coordination ensures comprehensive coverage across routine care, primary medical needs, and unexpected expenses.

Employers offering both HRA and DPC benefits create powerful value propositions for employees while controlling healthcare costs. The combination addresses immediate care needs while building long-term financial security in the healthcare sector.

Strategic implementation timeline ensures compliance

The One Big Beautiful Bill Act provides clear implementation deadlines for Direct Primary Care and HSA coordination, allowing providers and patients adequate time to structure arrangements properly before the new rules take effect.

Critical implementation dates:

• Effective date: January 1, 2026 (months beginning after December 31, 2025)
• DPC fee limits: $150 individual, $300 family maximum monthly
• Inflation adjustments: First adjustment occurs in 2027 based on 2025-2026 inflation
• Regulatory guidance: IRS and HHS must issue rules within 180 days of enactment
• Provider compliance: Restructure arrangements to meet legislative requirements

Strategic transition planning:

• Current DPC members: Review arrangements for compliance with new fee limits
• Prospective patients: Evaluate DPC options during 2025 for January 2026 enrollment
• Employers: Structure benefit programs to coordinate DPC and HDHP offerings
• Providers: Update contracts and service descriptions to ensure legislative compliance
• HSA trustees: Modify contribution systems to reflect new eligibility rules

Example family transition strategy:

• 2025 actions: Research qualifying DPC providers and HDHP options
• December 2025: Enroll in a qualifying HDHP for the January 2026 effective date
• January 2026: Begin DPC membership under the qualifying fee structure
• January 2026: Maximize HSA contributions using enhanced limits
• Throughout 2026: Document compliance with all regulatory requirements

Early planning enables families to maximize the benefits available in the first year under the new legislation. The coordination of open enrollment periods, DPC membership timing, and HSA contribution strategies ensures optimal utilization of tax advantages.

Implement comprehensive healthcare strategies in 2026

Don't miss unprecedented opportunities to combine Direct Primary Care access with Health savings account tax advantages starting January 2026. The One Big Beautiful Bill Act eliminates longstanding barriers that forced families to choose between convenient primary care and tax-advantaged savings.

Instead's comprehensive tax platform helps you navigate the complex coordination requirements while maximizing available tax benefits. Our intelligent system tracks DPC fee limits, monitors HSA contribution eligibility, and ensures full compliance with new regulatory requirements.

Get started with Instead today to build a comprehensive healthcare strategy that combines affordable primary care access, catastrophic medical protection, and substantial tax-advantaged savings for your family's long-term financial security. View our pricing plans to discover how we can help you maximize your healthcare tax benefits.

Frequently asked questions

Q: When can I start combining Direct Primary Care with HSA contributions?

A: The new rules take effect for months beginning after December 31, 2025, meaning January 1, 2026, is the first date you can maintain both a qualifying DPC arrangement and HSA eligibility. Plan your enrollment accordingly to maximize first-year benefits.

Q: What happens if my DPC membership costs more than the $150 individual or $300 family monthly limits?

A: Arrangements exceeding these monthly fee limits disqualify you from HSA contributions. Work with your DPC provider to structure your membership within the legislative limits, or be prepared to forgo HSA eligibility if you choose higher-cost arrangements.

Q: Can I pay my Direct Primary Care fees from my Health savings account?

A: Yes, DPC fees qualify as medical expenses eligible for tax-free HSA reimbursement. This creates powerful tax benefits, as you can contribute to your HSA with pre-tax dollars and use those funds tax-free to pay DPC membership costs.

Q: Do Direct Primary Care fees count toward my high-deductible health plan deductible?

A: No, DPC fees are separate membership payments and don't count toward your HDHP deductible. However, any services you receive through your HDHP beyond DPC coverage will apply to your deductible as usual.

Q: Can my employer pay for my Direct Primary Care membership?

A: Yes, employers can pay DPC fees as a tax-free employee benefit while maintaining your HSA eligibility. The employer receives a full business deduction, and you receive tax-free value without paying income or payroll taxes on the benefit.

Q: How do the enhanced HSA contribution limits work with Direct Primary Care?

A: If you qualify based on income, you can contribute substantially more to your HSA beyond standard limits, effectively doubling your tax-advantaged healthcare savings capacity. This creates powerful opportunities when combined with affordable DPC primary care access.

Q: What services can my Direct Primary Care provider include without disqualifying my HSA?

A: Qualifying DPC arrangements can include unlimited office visits, basic preventive care, minor procedures, in-office diagnostics, and care coordination. Excluded services include procedures requiring anesthesia, prescription drugs beyond vaccines, and advanced laboratory work.