Direct Primary Care is Now HSA Eligible: What the New Federal Bill Means

By: John Hsieh

Published: July 3rd, 2025

“For the first time, patients will be able to use Health Savings Accounts to pay for Direct Primary Care — a move that validates and expands the DPC model.”

Direct Primary Care (DPC) is now officially eligible for reimbursement through Health Savings Accounts (HSAs), thanks to the newly enacted “One Big Beautiful Bill” (H.R. 1). This landmark legislation allows individuals to use HSA funds to pay DPC membership fees, significantly expanding healthcare access, affordability, and patient choice (Washington Post).

So What Does This Mean for Direct Primary Care?

Until now, individuals enrolled in Direct Primary Care (DPC) arrangements were not allowed to contribute to Health Savings Accounts (HSAs). This restriction came from an outdated IRS interpretation that treated DPC as a “second health plan,” which disqualified HSA eligibility under federal law (IRS Notice 2004-50, Q&A 27).

The new legislation, originally introduced as H.R. 5688 and now enacted as part of the “One Big Beautiful Bill”, removes that barrier. It clearly states that:

A DPC arrangement is not considered a health plan under IRS code §223(c)(1)(A)(ii), meaning individuals can participate in DPC and still contribute to an HSA.
Fees paid for a DPC membership are treated as qualified medical expenses, and are therefore reimbursable using HSA funds.

The bill also defines some important boundaries around how DPC works with HSAs:

Monthly fee limits: HSA-eligible DPC arrangements are capped at $150 per month for individuals and $300 per month for families.
Scope of services: DPC coverage must consist solely of primary care services delivered by a primary care provider. See our services here.
Exclusions: Services outside the definition of primary care (such as procedures requiring general anesthesia, prescription drugs (other than vaccines), and laboratory tests not typically performed in an outpatient setting) are not covered under this provision.

This is a defining moment for the DPC model. For the first time, federal law recognizes DPC as a valid, non-insurance medical service that can be integrated into high-deductible health plans with HSAs.

What This Means for Employers and Individuals

Employers

The new law opens up new opportunities for employers, especially small and midsize businesses, to offer Direct Primary Care alongside traditional benefits without triggering HSA restrictions.

Previously, pairing DPC with a high-deductible health plan (HDHP) disqualified employees from contributing to an HSA. Now, that conflict is resolved. Employers can:

Integrate DPC with HSA-qualified plans without legal ambiguity
Use defined contribution models to reimburse employees for DPC membership

Even more importantly, employer contributions toward DPC memberships are treated as pre-tax benefit expenses. These payments are deductible for the employer, reduce payroll taxes, and may be excluded from the employee’s taxable income when structured appropriately. This creates a powerful financial incentive to include DPC as part of a modern benefits strategy, especially when paired with HSA compatibility.

This shift makes it easier to control healthcare costs while improving access to high-touch, relationship-based primary care. Employers no longer have to choose between DPC and tax-advantaged benefits.

Individuals and Families

For individuals and families enrolled in Direct Primary Care, the change is simple but powerful: you can now use your HSA to pay for your membership. That means:

Pre-tax dollars can now be used for DPC, reducing out-of-pocket costs
DPC is formally recognized as a legitimate, reimbursable medical service
Patients can confidently combine DPC with high-deductible insurance plans without worrying about compliance issues

This reform removes a confusing financial barrier and makes it easier for individuals to choose primary care built on access, affordability, and trust.

What Happens Next?

The Direct Primary Care and HSA provisions in the new law go into effect on January 1, 2026. That means individuals will be able to start using HSA funds for DPC memberships beginning in the 2026 tax year.

Between now and then, individuals, employers, and plan administrators can begin preparing by:

Reviewing benefit plan designs to accommodate DPC alongside HSA-qualified insurance
Communicating with employees or members about the upcoming change
Establishing or adjusting HSA contributions to account for DPC-related expenses
Consulting with benefits advisors or TPAs to ensure documentation and compliance are in place

For DPC providers like SALTA, this creates a clear path to integrate with mainstream benefit structures without sacrificing the simplicity and accessibility that make DPC work.

Take the Next Step with SALTA

With DPC now officially compatible with HSAs, there’s never been a better time to take control of your healthcare.

If you’re an individual, you can now use pre-tax dollars to cover your membership, making SALTA’s 24/7 primary care even more accessible and affordable.
If you’re an employer, we can help you integrate DPC into your benefit offerings in a way that supports your team and your bottom line.

Join SALTA today or schedule a free consultation to see how Direct Primary Care can work for you.

About the Author

John Hsieh is the Director of Growth at SALTA Direct Primary Care and the Michigan Chapter Lead for the Free Market Medical Association (FMMA). He is passionate about transforming healthcare through patient-centered models like DPC and works closely with employers, brokers, and clinicians to drive cost-effective, high-quality care.