The Law Made DPC Memberships HSA-Eligible. The IRS Guidance Added Three Conditions.

Legislation by DPC Insider
#HSA#IRS#legislation#One Big Beautiful Bill#HDHP#employer benefits
Sources: IRS Notice 2026-05: Expansion of HSA Availability and Eligibility Under the OBBBA · Treasury, IRS Provide Guidance on New Tax Benefits for HSA Participants Under the One Big Beautiful Bill · DPCA 2026 State of Direct Primary Care Survey · New IRS Rules for HSA-Compatible Direct Primary Care (Ameriflex) · IRS Notice 2026-5: Expansion of HSA Availability and Eligibility Under the OBBBA — Current Federal Tax Developments

A patient with an HSA-linked high-deductible health plan asks whether they can pay their monthly DPC membership fee with HSA dollars. A year ago, the answer was almost certainly no — and even careful benefit advisors weren’t sure. Since January 1, 2026, the answer is probably yes, with conditions that the IRS spent December 2025 spelling out in formal guidance.

The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, is the legislation that changed the underlying rule. IRS Notice 2026-05, issued December 9, 2025, is the guidance that explains exactly what a DPC arrangement has to look like to qualify.

Six months into implementation, those conditions deserve a direct read — especially because the three-part test that IRS Notice 2026-05 establishes is not always what DPC practices or patients expect.

What Changed

Before the OBBBA, DPC memberships sat in a persistent regulatory gray zone for Health Savings Account holders. The IRS had historically treated certain primary care membership arrangements as insurance-like, which meant that having one could potentially jeopardize a patient’s ability to contribute to an HSA. The workaround — pairing DPC with a conventional insurance plan rather than an HDHP — was a common recommendation, but it created its own coverage trade-offs and left the combination in an ambiguous legal space.

The OBBBA resolved the core conflict. A DPC arrangement that meets the statute’s definition — referred to in the law as a “Direct Primary Care Service Arrangement,” or DPCSA — no longer disqualifies a patient from contributing to an HSA. For the first time, DPC and HSA contributions can coexist on the same benefits card without triggering a compliance problem.

Three Conditions That Have to Be Met

IRS Notice 2026-05 defines what makes a DPCSA HSA-compatible. Three conditions must all be true.

1. The fee must be the only payment.

A qualifying DPCSA must operate on a fixed periodic fee — and only a fixed periodic fee. The practice cannot separately bill for services through insurance or any other payment channel. If the practice runs any insurance billing alongside the membership for services the DPCSA is supposed to cover, the arrangement may lose its qualified status for patients attempting to use HSA dollars for that membership.

This condition is consistent with how most DPC practices already operate. The defining feature of the DPC model is that the membership fee is the sole payment — no insurance billing for covered primary care services. But practices that have added any insurance billing for any covered service should review that structure carefully before confirming HSA eligibility to patients.

2. The practice must provide qualifying services from qualifying practitioners.

Not every clinician type or service line qualifies under the IRS definition. The Notice specifies that qualifying primary care practitioners include physicians practicing family medicine, internal medicine, geriatric medicine, or pediatric medicine — along with nurse practitioners, clinical nurse specialists, and physician assistants.

On the services side, the arrangement must provide primary care services in the conventional sense. It cannot include procedures requiring general anesthesia. It cannot include prescription drugs (with the exception of vaccines). It cannot include laboratory services not typically performed in an ambulatory primary care setting.

For the large majority of independent DPC practices — a solo family physician or internist who handles preventive care, acute visits, chronic disease management, and basic procedures — these conditions are met without any structural change. The IRS definition covers the DPC model as most practices run it.

3. The monthly fee must not exceed $150 for individuals, or $300 for families.

This is the cap that has generated the most questions. The limit applies to the total fees across all DPCSAs covering a single individual. Fees can be billed for periods longer than one month — up to a full year — provided the aggregate fee does not exceed the monthly cap on an annualized basis. An individual paying an annual lump sum of $1,800 (equal to $150 × 12 months) stays within the limit. An individual paying an annualized equivalent of $200 per month does not.

The Cap in Context

The $150 threshold is worth putting next to current DPC pricing. The DPCA’s 2026 State of Direct Primary Care Survey found that the average DPC membership fee is $98 per month. The median practice in the DPC field is pricing comfortably under the individual cap.

DPC pricing, however, is not uniform. Many practices use age-adjusted fee schedules — younger patients at the lower end, patients over 50 or 65 at the higher end — which means the same practice might have patients whose memberships fall under the cap and patients whose memberships sit above it. Practices that charge premium-tier or concierge-adjacent pricing may price adult memberships in the $150-to-$250 range, where the HSA-eligibility question has a more complicated answer.

The $150 figure also has a built-in adjustment mechanism. The cap is indexed to inflation after 2026, per the statute. The 2026 figure is a floor, not a permanent ceiling.

The HDHP Requirement Still Applies

The OBBBA did not change the foundational HSA eligibility rule: to contribute to a Health Savings Account, a patient still needs to be enrolled in a qualifying High Deductible Health Plan. DPC membership alone, at any price point, does not open up an HSA.

What changed is that an HDHP holder who also carries a DPC membership is no longer treated as disqualified from HSA contributions because of that membership — provided the DPCSA meets the three conditions above. The law made DPC and HSA contributions compatible with each other. It did not make DPC a substitute for the underlying insurance coverage requirement.

For employer benefit design, this clarification has practical implications. The combination of a qualifying HDHP, a DPC membership priced under $150 per month, and an employer-funded or employee-funded HSA is now an explicitly legal benefit structure under federal law. Employers that have been cautious about pairing DPC with HSA-eligible plans because of regulatory uncertainty now have clearer legal ground to act on.

What This Means

For DPC practices, three things are worth reviewing now. First, confirm that the practice’s billing structure is truly fee-only — no insurance billing runs alongside the membership for covered primary care services. Second, confirm that the clinicians in the practice fit the IRS definition of qualifying primary care practitioners. Third, check whether the practice’s pricing keeps patients within the $150-per-month threshold for HSA contribution eligibility, and be transparent with patients whose memberships fall above it.

For patients and DPC members, the question to ask is whether your primary insurance plan is a qualifying HDHP. If it is, and if your practice’s arrangement meets all three IRS conditions, paying your monthly DPC fee from your HSA became a legitimate option on January 1, 2026.

IRS Notice 2026-05 is a 15-page document. The DPCSA-specific provisions run approximately four pages. For practices that want to point patients to the primary source, or that want to verify their own compliance posture, the full notice is publicly available from the IRS.

The regulatory change the DPC field has waited years for is in place. The fine print that determines who qualifies is now specific, public, and readable.