Your Patients Can Now Pay for DPC with Their HSA. Here's What You Need to Know.

Hundreds of billions of dollars sit in HSA accounts across the country. Until this year, DPC physicians couldn’t tap into any of it.

That just changed. As of January 1, 2026, patients can use their HSA funds tax-free to pay for DPC memberships. No workarounds, no gray areas. The IRS put it in writing.

How We Got Here

For years, the IRS treated DPC arrangements as a form of “other coverage.” That designation meant HSA holders who enrolled in a DPC practice risked losing their ability to make HSA contributions altogether. Even if they had a qualifying high-deductible health plan, signing up for DPC put their HSA status in jeopardy.

Congress changed the rules when it passed the One Big Beautiful Bill Act in July 2025. Buried inside a massive tax-and-spending package was a provision the DPC community had pushed for years. Qualifying DPC arrangements would no longer count as competing insurance.

The IRS followed up on December 9, 2025 with Notice 2026-05, laying out the practical rules. The public comment period on that notice closed March 6, 2026. Final Treasury regulations are now in the pipeline.

The bottom line is straightforward. Patients can enroll in a DPC practice, keep their HSA-eligible HDHP, contribute to their HSA, and use those HSA funds to pay their monthly DPC fee. All tax-free.

What Your Practice Needs to Qualify

Not every DPC arrangement automatically qualifies. The IRS set specific requirements, and if your practice doesn’t meet them, your patients can’t use HSA funds for their fees.

You must be in the right specialty. Qualifying arrangements cover primary care services delivered by physicians in family medicine, internal medicine, geriatric medicine, or pediatric medicine. Nurse practitioners, clinical nurse specialists, and physician assistants also qualify. If you’re outside these specialties, the arrangement may not meet the standard.

Your fee structure must be fixed and periodic. Your sole compensation for the arrangement must be a flat monthly fee. You can’t bill separately through insurance for the same services and still maintain HSA-compatible status. This is generally how DPC already works. But it’s worth reviewing your fee agreement language carefully.

Stay within the fee caps. To preserve a patient’s ability to contribute to their HSA, the monthly fee can’t exceed $150 for individual coverage or $300 for arrangements covering more than one person. These limits will be adjusted for inflation in future years. If your fees run higher than these thresholds, patients technically lose the ability to make new HSA contributions. They can still use existing HSA funds to pay your fees as a qualified medical expense, though.

Scope of services matters. The arrangement must cover only primary care services. It can’t include procedures requiring general anesthesia, prescription drugs other than vaccines, or laboratory services that aren’t typically administered in an ambulatory primary care setting. This maps reasonably well to how most DPC practices already operate. Still, it’s worth a careful read if you’ve been expanding your service menu.

The Employer Wrinkle

One piece of the IRS guidance you might want to flag for your employer clients. If an employer pays a patient’s DPC membership fee, whether directly or through a cafeteria plan salary reduction, the payment is treated as excludable compensation. That sounds like a good deal for employees.

But there’s a catch. Those employer-paid fees can’t then be reimbursed from the employee’s HSA as a qualified medical expense. HSA funds can cover DPC fees the patient pays out of pocket, but not fees the employer has already covered.

This creates planning considerations for employers who want to offer DPC as a benefit alongside HDHP coverage. It’s not a dealbreaker, but the details matter when structuring these packages.

Why This Is About More Than Taxes

The tax mechanics matter, but the strategic implication for DPC physicians is larger. For years, DPC advocates have argued that the model’s main challenge isn’t physician interest or patient satisfaction. It’s distribution. Getting the right patients in the door at scale has been the bottleneck.

HSA compatibility removes a real objection that brokers, HR departments, and financially-savvy patients used to dismiss DPC. The “not compatible with my setup” excuse is gone. Patients with HSA-eligible plans can now use those funds to pay for the kind of care they actually want.

That’s a meaningful unlock for independent DPC physicians trying to grow their panels. It’s also significant for DPC networks like Hint Health and ProPartners working with employers to structure benefit packages.

What This Means

If you’re a DPC physician, your practical checklist is clear. Review your membership agreements to confirm your fee structure is fixed and periodic. Make sure your pricing is transparent about the $150/$300 monthly cap and its HSA-contribution implications. And start communicating this change to prospective patients.

A lot of HSA holders don’t know their DPC membership is now a qualified use of their funds. That’s an educational opportunity. The practices that move first to explain it clearly will have an edge in growing their panels.

For employers and benefits consultants, the planning questions are different. You’ll want to understand the interaction between employer-paid DPC fees and HSA reimbursement rules before rolling out new benefit designs. Final Treasury regulations will likely clarify some of the open definitions around qualifying primary care services, so those are worth watching.

The single largest policy barrier to DPC growth has been removed. What happens next depends on how quickly the DPC community communicates the change to the patients and employers who stand to benefit most.