Patients can now use health savings account funds for qualifying direct primary care fees, and membership in certain DPC arrangements no longer prevents an otherwise eligible patient from contributing to an HSA. The federal changes took effect January 1, 2026. For a practice owner, the important question is whether the actual membership terms support the HSA statements made to patients. [1]
Before updating a fee schedule or making claims about HSA contribution eligibility or HSA payment of membership fees on your website, review what the membership includes, how the practice gets paid and what patients are being told. The rules for making new HSA contributions and using money already in an HSA are different. That distinction deserves attention in both your agreement and your enrollment materials.
This article addresses federal HSA rules for DPC practices. It does not determine any patient's tax treatment or replace a review of applicable state law.
Separate HSA contributions from payment of DPC fees
Start with two questions:
- Does enrollment in this DPC arrangement affect the patient's ability to make new HSA contributions?
- Can the patient use HSA funds to pay or reimburse this arrangement's fees?
The first question includes a monthly fee threshold. The second has its own requirements. Under IRS Notice 2026-5, Q&A 20, an arrangement can exceed the contribution-eligibility threshold yet still have fees that qualify for HSA reimbursement, provided it otherwise meets the applicable DPC definition. There is no separate fixed-fee dollar cap for that reimbursement rule. [2]
This does not make every membership charge reimbursable. It also does not establish a particular patient's eligibility to contribute. Other HSA requirements still apply, including the rules governing health-plan coverage and other disqualifying coverage. [3]
Understand the monthly DPC fee thresholds
For 2026, the federal exception that preserves an otherwise eligible individual's HSA contribution eligibility generally requires aggregate DPC fees of no more than:
- $150 per month for an individual; or
- $300 per month if the individual is covered by an arrangement that covers more than one person.
The test considers the individual's aggregate fees across DPC arrangements, rather than only the bill from one practice. These are DPC membership-fee thresholds, not the annual amounts a person may contribute to an HSA. [3]
The IRS has confirmed the same $150 and $300 thresholds for 2027 in Revenue Procedure 2026-24. Although the statute provides for inflation adjustments after 2026, the published 2027 DPC amounts did not increase. [4]
For example, consider a $175 monthly individual membership that otherwise meets the federal service and billing requirements. Because its price exceeds the $150 contribution-eligibility threshold, this DPC arrangement does not preserve the patient's eligibility to make new HSA contributions while enrolled. Exceeding that threshold does not, by itself, prevent the patient from using existing HSA funds to pay or reimburse qualifying fees under the separate distribution rule. Whether the patient can contribute or obtain tax-free reimbursement still depends on the applicable requirements and the patient's circumstances. [2]
Review the services promised in the membership
The federal definition requires care consisting solely of primary care services furnished by qualifying primary care practitioners, with a fixed periodic fee as the sole compensation for that care. The practitioner definition includes physicians with specified primary-care specialty designations, as well as nurse practitioners, clinical nurse specialists and physician assistants. [3]
The definition excludes:
- Procedures requiring general anesthesia
- Prescription drugs other than vaccines
- Laboratory services not typically administered in an ambulatory primary care setting
Review the full benefit package, including any premium tier or bundled add-on. The IRS says the arrangement's terms control; a patient cannot make an otherwise nonqualifying arrangement qualify simply by declining to use excluded services. [2, Q&A 14 and 17]
A useful review begins with a service inventory. For each item, identify whether the membership includes it, whether another party provides it and whether anyone charges separately. Give counsel the agreement, price sheet and actual billing workflow together.
Check additional charges and outside services
A fixed membership fee combined with separate charges for the care provided under that membership can create a problem. The IRS specifically addresses arrangements in which a person must be a member and pay the periodic fee to receive certain care, but is then billed separately for that care. Such an arrangement does not meet the DPC definition in the guidance. [2, Q&A 11]
The IRS also recognizes a different situation: participating providers may offer services outside an otherwise qualifying DPC arrangement, make those services available regardless of membership and bill both members and nonmembers separately. [2, Q&A 12]
This makes the boundary between membership services and outside services important. Review how appointments are booked, who can buy each service, what patients see on the website and how staff explain extra charges. A label in the contract will be difficult to rely on if the practice operates differently.
Align the agreement and patient communications
Before promoting an HSA-related benefit, compare the membership agreement with the practice's pricing page, FAQs, enrollment forms and staff scripts. Check whether they describe the same offering.
Bring these questions to a review:
- Which services does the periodic fee actually cover?
- Are individual and multiperson membership prices described clearly?
- Does any additional charge relate to care included in the arrangement?
- Do the documents distinguish HSA contribution eligibility from reimbursement?
- Who answers a patient-specific tax question, and what records can the practice provide?
Avoid a blanket promise that every patient can contribute to an HSA or that every charge qualifies for tax-free payment. A practice can accurately explain its services and fees while directing personal eligibility questions to the patient's qualified tax adviser.
Keep receipts and membership descriptions clear enough for patients and their advisers to understand what was purchased and the period covered. Payment processing alone does not establish the legal treatment of the membership.
Common questions from DPC practices
Can we bill the membership annually?
Yes, the IRS allows billing periods longer than a month and no longer than a year when the applicable conditions are met. To preserve contribution eligibility under the DPC exception, fixed periodic fees must remain within the applicable monthly threshold on an annualized basis. An annual fee above that threshold does not, by itself, preclude HSA payment or reimbursement of qualifying DPC fees, but the arrangement will not preserve eligibility to make new HSA contributions. The IRS gives $1,800 for a year of individual coverage as one 2026 example. [2, Q&A 13]
Can a patient reimburse fees already paid by an employer?
The IRS says employer-paid DPC fees, including payments through salary reduction under a section 125 cafeteria plan, are not the HSA beneficiary's expenses for this purpose. They cannot also be reimbursed from the beneficiary's HSA. Employer arrangements deserve a separate benefits and tax review. [2, Q&A 18]
Do DPC fees count toward the patient's health plan deductible?
The IRS says that, where an individual is enrolled in both a DPC arrangement and an HDHP, the individual's DPC membership fees do not count toward that HDHP's annual deductible or out-of-pocket maximum. Avoid suggesting otherwise in enrollment materials. [2, Q&A 16]
Does a qualifying HSA arrangement settle other legal questions?
No. The HSA provisions address particular federal tax questions. A practice still needs to assess the other rules relevant to its business and care model. Treat the HSA review as one part of practice planning, rather than a substitute for reviewing state requirements, Medicare arrangements or privacy obligations.
Review your DPC offering before changing it
If you are planning new membership tiers, changing prices for 2027 or revising HSA language, gather the current agreement, proposed service list, fee schedule and patient-facing materials. A review of those documents together can identify mismatches before patients enroll.
Kim Cunningham helps DPC practices with membership agreements, healthcare contracts and related legal questions in South Carolina, Georgia and Ohio. Learn about the firm's healthcare legal services or request a free 30-minute consultation to discuss your practice documents. Keep your initial inquiry general and do not include patient records or confidential information. Individual tax questions should be reviewed with a qualified tax adviser.
General educational information only, not legal or tax advice. Application depends on the arrangement, the individual's circumstances and current law. Contacting the firm does not create an attorney-client relationship. Research checked October 4, 2026; sources last checked October 11, 2026.
Sources
[1] IRS, “Treasury, IRS provide guidance on new tax benefits for HSA participants” (effective-date announcement). irs.gov
[2] IRS Notice 2026-5, published in Internal Revenue Bulletin 2026-2. Section III.C, Q&A 11–20, addresses separate billing, outside services, longer billing periods, excluded benefits, deductibles, employer-paid fees and reimbursement. Q&A 20 is the key authority distinguishing contribution eligibility from reimbursement above the monthly fee threshold.
[3] 26 U.S.C. § 223 (Cornell Law School, Legal Information Institute). Sections 223(c)(1)(E) and 223(d)(2)(C)(v) set out the DPC provisions; section 223(c)(1) provides the broader eligible-individual framework. The DPC provisions were added by Public Law 119–21, section 71308.
[4] IRS Revenue Procedure 2026-24, published in Internal Revenue Bulletin 2026-25. Section 3.01(2) confirms the 2027 aggregate monthly DPC thresholds of $150 and $300. These must not be confused with annual HSA contribution limits.