For years, individuals enrolled in direct primary care arrangements faced a frustrating choice: enjoy the benefits of membership-based primary care or maintain eligibility to contribute to a Health Savings Account (HSA). Thanks to recent legislation, that’s no longer the case.
The One, Big, Beautiful Bill Act (OBBBA), enacted in July 2025, fundamentally changed the relationship between direct primary care and HSAs. The IRS has now provided detailed guidance on how these arrangements work together, opening new possibilities for healthcare consumers.
What Changed?
Previously, enrollment in a direct primary care service arrangement typically disqualified individuals from HSA contributions. The arrangement was considered a health plan that provided coverage before the minimum annual deductible was satisfied, making enrolled individuals ineligible.
Now, qualifying direct primary care service arrangements (DPCSAs) are no longer treated as health plans for HSA eligibility purposes. This means you can be enrolled in both a high deductible health plan (HDHP) and a qualifying DPCSA while maintaining your ability to contribute to an HSA.
What Qualifies as an HSA-Compatible DPCSA?
According to the IRS, a DPCSA must meet specific criteria to avoid disqualifying you from HSA contributions:
Core Requirements
Medical Care Scope: The arrangement must provide medical care consisting solely of primary care services delivered by qualified primary care practitioners. These practitioners include physicians specializing in family medicine, internal medicine, geriatric medicine, or pediatric medicine, as well as nurse practitioners, clinical nurse specialists, and physician assistants.
Compensation Structure: The sole compensation must be a fixed periodic fee. If the arrangement bills separately for services through insurance or other means, it doesn’t qualify. However, providers can offer additional services outside the arrangement and bill for those separately to both members and non-members without affecting the DPCSA status.
Service Exclusions: The primary care services cannot include procedures requiring general anesthesia, prescription drugs (except vaccines, which are allowed), or laboratory services not typically administered in an ambulatory primary care setting.
Fee Limitations
For an arrangement to maintain your HSA eligibility, there are monthly fee caps:
- Individual coverage: $150 per month
- Family coverage: $300 per month
These limits are aggregate amounts across all DPCSAs for an individual and will be adjusted annually for inflation after 2026.
The fees can be billed for periods longer than a month (up to a year), as long as they remain fixed, periodic, and don’t exceed the monthly limit on an annualized basis. For example, in 2026, an individual could pay $1,800 annually, $900 semi-annually, or $450 quarterly.
Using Your HSA for DPCSA Fees
Here’s where it gets even better: you can use HSA funds to reimburse DPCSA fees as qualified medical expenses. This applies to any DPCSA that meets the basic service and practitioner requirements, even if the fees exceed the monthly limits that determine HSA contribution eligibility.
Important Distinctions
If your DPCSA fees exceed the monthly cap ($150 individual/$300 family), you face a trade-off:
- You can still use HSA funds to reimburse the DPCSA fees
- But you cannot make new HSA contributions while enrolled in that arrangement
This flexibility allows individuals to choose arrangements that best fit their needs while understanding the HSA implications.
Reimbursement Timing
HSAs have flexibility in how DPCSA fees are treated for reimbursement purposes. The fees can be considered incurred on:
- The first day of each month of coverage (pro rata basis)
- The first day of the coverage period
- The date the fees are actually paid
This means you could immediately reimburse a substantiated annual DPCSA fee from your HSA, even if you paid it before the coverage period begins.
Employer-Paid Fees
If your employer pays DPCSA fees on your behalf (including through a Section 125 cafeteria plan salary reduction), those payments cannot be reimbursed from your HSA. These employer payments are treated as compensation excluded from your gross income, not as your personal expenses.
What About HDHP Coverage of DPCSA Fees?
An important limitation: HDHPs cannot pay DPCSA membership fees or provide DPCSA membership as a benefit without satisfying the deductible first. The exemption only applies to HSA eligibility, not to what HDHPs can cover pre-deductible.
Additionally, DPCSA fees paid by an individual don’t count toward the HDHP’s annual deductible or out-of-pocket maximum, since they’re not payments for services covered by the HDHP.
The new rules create meaningful opportunities:
- Dual Enrollment: You can now maintain both HDHP/HSA coverage and a qualifying direct primary care arrangement
- HSA Reimbursement: Use HSA funds tax-free to pay for DPCSA membership fees
- Fee Flexibility: Choose arrangements with various billing cycles, from monthly to annual
- Clear Limits: Understand the $150/$300 monthly thresholds that determine HSA contribution eligibility
Effective Date
These changes apply to months beginning after December 31, 2025, though the IRS has provided guidance allowing retroactive HSA contributions for 2025 under certain circumstances related to other OBBBA provisions.
Making It Work for You
As you evaluate direct primary care options, consider:
- Whether the arrangement’s fees fall within the HSA eligibility limits
- How the membership fee structure aligns with your healthcare budget
- The services offered and whether they meet the IRS requirements
- Your preference for maintaining HSA contribution eligibility versus accessing potentially more comprehensive DPC arrangements
The integration of direct primary care with HSA eligibility represents a significant expansion of healthcare choice. By understanding these rules, you can make informed decisions that optimize both your primary care experience and your tax-advantaged healthcare savings strategy.
Ameriflex Can Help
From HSA eligibility guidance to compliant plan administration, our experts can help you align direct primary care with a benefits strategy that maximizes choice, savings, and simplicity.