Direct Primary Care Employer Contracts

Quick answer: A DPC employer contract should settle five things in writing before the first employee enrolls: who signs which agreement, exactly what the employer's payment covers, what happens to a patient's membership when employment ends, what information the employer will (and will not) receive, and how the arrangement fits the state DPC rules and federal benefit and tax rules that apply. The employer agreement and each patient's membership agreement are related, but they are not the same document.

Working with employers can bring a practice many members through one relationship. It also adds a second contracting party with its own goals, its own advisers and its own questions about cost and reporting. This article explains the questions I suggest physicians settle before signing an employer-sponsored direct primary care (DPC) arrangement.

Who signs which agreement?

A practical way to structure an employer-sponsored arrangement is to separate two relationships:

An employer services agreement between the practice and the employer, covering eligibility, fees, invoicing, reporting and the term of the relationship.
An individual membership agreement between the practice and each patient, covering the care relationship itself.

State DPC laws are usually written around the patient relationship. Georgia's statute, for example, defines a direct primary care agreement as a contract between a physician and an individual patient or the patient's legal representative, and requires it to be signed by the physician (or the physician's agent) and the patient or representative. O.C.G.A. § 33-7-2.1(a), (d). Ohio's DPC provision addresses permission for a third party to pay the patient's fees. R.C. § 3901.95.

The employer’s agreement to pay should not be confused with the patient’s agreement to membership terms. In Georgia and Ohio, the DPC statutes contemplate an agreement with the patient or the patient’s legal representative. An employer is not the patient’s legal representative merely because it pays the fee. Counsel should confirm how the employer and patient documents work together under the applicable state law.

What does the employer's payment cover?

Write down the membership services the employer is funding before negotiating the price:

Which employees, and whether spouses or dependents, are eligible.
Which services the periodic fee includes, and which services are billed separately by the practice or by others, such as labs, imaging or medications.
How the practice invoices the employer, when payment is due, and what happens if a payment is late.
Whether the employer pays the entire fee or the employee pays part of it.

Keep this description consistent with your standard membership terms. If the employer version promises more access, a different response time or extra services, make that difference explicit so staff know which terms apply to which patient. A per-member price that does not match the services described invites disputes later.

What happens when an employee leaves the job?

Employment changes are routine, so the contract should not treat them as an exception. Leaving a job may end employer funding, but it should not be treated as automatically ending the patient’s membership or care without reviewing the applicable contract terms and legal requirements. The agreements should explain when employer payment stops, whether and how the patient can continue individually, and what notice and transition steps apply if the membership or care relationship ends. Decide in advance, within the bounds of the law:

How and when the employer reports new hires, departures and eligibility changes.
When the employer's payment for a departing employee stops.
Who is responsible for fees during any notice or transition period, and how prepaid amounts and refunds will be handled.
Whether the patient may continue as an individual member, at what price and with what notice.
How the practice communicates with the patient about the change, and how continuity of care is handled if the patient does not continue.

Check these steps against applicable state law, including any DPC-specific statute and professional requirements governing termination of care. For example, Georgia requires at least 30 days’ notice from the physician, allows a patient notice requirement of no more than 30 days, and requires refunding unearned fees within 30 days after termination. The statute also identifies grounds for discontinuing care. Ohio requires written termination notice, with termination effective on receipt or within no more than 60 days after receipt, as specified in the agreement, and prohibits termination penalties and fees. Do not assume that the same DPC-specific rules apply in South Carolina, Georgia and Ohio.

What information will the employer receive?

Employers often ask for data to show that the arrangement is worth paying for. Decide in writing what the practice will share before the first report is requested.

Start the privacy analysis by asking whether the practice is a HIPAA covered entity based on its actual activities, including whether it transmits health information electronically in connection with a covered transaction. 45 C.F.R. § 160.103; HHS covered-entity guidance. An employer paying the fee does not settle that question, and it does not give the employer access to patient records. If HIPAA applies, a covered entity generally may not disclose protected health information without a valid authorization unless a rule permits it, and generally may not condition treatment on the patient signing one. 45 C.F.R. § 164.508(a)(1), (b)(4). State confidentiality duties and your own agreements may also apply.

Define employer reporting narrowly. I generally recommend aggregate, de-identified reporting—not individual employee health information. Any proposed disclosure beyond that should receive separate legal review, with valid patient authorization where required. Identify the enrollment and billing information needed to administer the arrangement, and confirm the legal basis for sharing it. Do not assume that calling a report “aggregate” makes it de-identified, especially when a small employee group could make individual patients identifiable. If HIPAA applies, reports described as de-identified must meet HIPAA’s de-identification requirements. Explain permitted reporting consistently in the employer agreement and patient-facing documents; putting a disclosure in a contract does not, by itself, make it lawful. A statement in the membership agreement about reporting is not a substitute for a valid HIPAA authorization when one is required. See my HIPAA guide for DPC and concierge practices for related questions.

How do benefit and tax rules fit in?

An employer paying for employees' medical care raises questions on the employer's side as well as yours. Federal law defines an employee welfare benefit plan to include a plan, fund or program an employer maintains to provide medical care to participants, "through the purchase of insurance or otherwise." 29 U.S.C. § 1002(1). Whether a particular DPC arrangement is part of an employer's benefit plan, and what plan documents or notices that requires, is a question for the employer and its benefits advisers. Before enrollment begins, the employer should obtain benefits and tax advice on the proposed structure, and the practice should coordinate its contract and administrative obligations with that review. I coordinate the practice’s agreement and launch process with the employer’s benefits counsel before enrollment begins.

HSA contribution eligibility and HSA reimbursement are separate questions. Under IRS Notice 2026-5, Q&A 18, an employee cannot take a tax-free HSA reimbursement for DPC fees paid by the employer, including fees paid through pre-tax salary reductions under a cafeteria plan. Any employee-paid, after-tax portion requires a separate review under the HSA rules. Enrollment materials should accurately distinguish who pays each portion of the fee and should not promise HSA reimbursement for employer-paid amounts. My article on direct primary care HSA rules explains the contribution-eligibility thresholds and other HSA questions.

These are review questions, not a conclusion about any particular benefits structure.

Checklist before you sign an employer DPC contract

Employer services agreement and individual membership agreement drafted and consistent with each other
Eligible employees, dependents and enrollment process defined
Included services, separately billed services and per-member fee listed
Invoicing, late payment and contract-term provisions settled
Departure, eligibility-change and individual-continuation process defined, including who pays during any notice or transition period
Treatment of prepaid fees and unearned amounts addressed, including any required refunds, who receives them and when
Process defined for employer nonpayment or termination of the employer agreement, including patient notice, payment responsibility and options for continuing membership individually
Employer-contract termination distinguished from termination of patient membership or care, with applicable notice, refund and continuity-of-care requirements reviewed
Employer reporting limited and described in both agreements
HIPAA covered-entity status and other confidentiality duties reviewed
Employer's benefit-plan and HSA position confirmed with its advisers
Website, enrollment forms and staff scripts updated to match

A checklist organizes the review. It does not establish that an arrangement complies with every applicable law.

Common questions

Can an employer sign the DPC agreement on behalf of its employees?

Generally, no. The employer generally cannot—and should not—sign the patient’s membership agreement on the employee’s behalf. Paying the membership fee does not give the employer authority to act as the patient’s legal representative. State DPC provisions are often written around an agreement with the individual patient or the patient's representative. An employer services agreement usually sits alongside, not in place of, each patient's membership agreement.

Can an employer see which employees visited the practice?

Not simply because it pays the fee. Patient information shared with an employer needs a legal basis, such as a valid patient authorization where HIPAA applies, and should match what both agreements say about reporting.

Can employees use their HSA to pay a DPC fee their employer already pays?

No. The IRS says employer-paid DPC fees, including salary-reduction payments through a cafeteria plan, are not expenses the employee can reimburse from an HSA. Any employee-paid, after-tax portion requires a separate review.

What happens to the membership if the employee quits?

That depends on what the contracts say. Decide in advance when the employer's payment ends, whether the patient can continue individually and how continuity of care is handled.

Sources

Discuss your employer DPC arrangement

I work with physicians starting and running direct primary care, concierge and Direct Specialty Care practices, including membership agreements and employer arrangements. If an employer has approached your practice, or you want to build an employer offering, explore my healthcare legal services or request a consultation. Keep the first inquiry general and leave out patient information and confidential records. Related reading: Starting a Direct Primary Care Practice in Ohio and Starting a Direct Primary Care Practice in Georgia.

Serving South Carolina, Georgia, and Ohio.

General educational information, not legal advice. Current law and your particular arrangement determine the appropriate approach. Reading this article or contacting the firm does not create an attorney/client relationship.