An ICHRA Can Buy an HSA Bronze Plan. Paying Medical Bills Can Undo It
IRS Notice 2026-5 says an Exchange bronze plan bought with an employer's ICHRA still counts as an HSA plan, but an HRA generally must reimburse only premiums. Here is where a DPC membership fits in a small employer's benefit stack.
Market Desk 5 min read Analysis
Here is a benefit a small employer can build for Jan. 1 renewals this fall. The business gives each worker an ICHRA allowance. The worker uses it to buy a bronze plan on the Exchange. That plan now counts as a high-deductible health plan, so the worker can contribute to an HSA and pay a direct primary care membership out of it.
IRS Notice 2026-5 approves each of those steps. It also contains the sentence that can undo them: “generally, an HRA (including an ICHRA) is permitted to reimburse only premiums for the HRA to be a health plan that would not disqualify an employee from being an eligible individual.”
Read plainly, an ICHRA built to reimburse more than premiums can cost the worker the right to contribute to the HSA.
A BenefitsPRO column published Oct. 26 calls this a tripwire. Its author, Dana Y. Lujan, writes from “having worked on the payer side of this business” and sums it up in one line: “Eligible components do not automatically add up to a compliant whole.”
The timing is real. Marketplace open enrollment for 2027 coverage starts Nov. 1, according to HealthCare.gov, and a worker has to pick a plan by Dec. 15 for coverage that starts Jan. 1.
Four links the notice approves
Start with the plan. The 2025 tax law treats bronze and catastrophic plans available as individual coverage through an Exchange as HDHPs for months beginning after Dec. 31, 2025. The notice says that holds even when a plan misses the usual minimum deductible or out-of-pocket limits.
That is a large change for this market. Before the law, the notice explains, many bronze plans didn’t qualify, because their out-of-pocket maximum ran over the HDHP limit or they paid for care that wasn’t preventive before the deductible.
Then the money. In Q&A-5, the IRS says a bronze or catastrophic plan doesn’t lose that status because an employer’s ICHRA paid for it. Q&A-6 extends the treatment to an identical plan bought off the Exchange.
Then the membership. A direct primary care arrangement whose aggregate fees stay at or under $150 a month for one person, or $300 for an arrangement covering more than one, isn’t treated as a health plan for HSA eligibility. The HSA can pay the fee.
Allowance, plan, account, membership. Each link is in the notice.
Where the chain gets thin
The weak link is the HRA itself, and it sits inside the same answer that approves the ICHRA purchase. The IRS attaches the premiums-only condition there and cites its 2008 guidance on HRAs. Lujan’s column describes the failure case directly: “an ICHRA that reimburses nonpremium medical expenses before the deductible can undermine HSA eligibility, even when the individual policy and the direct primary care arrangement each qualify on their own.”
That cuts against instinct. The generous ICHRA, the one that also pays a worker’s urgent care bill, is the version that can cost the worker the right to contribute to the HSA.
Three more limits sit in the same document, and a small employer can trip over each one.
Group bronze is treated differently. Q&A-8 says bronze coverage a small employer offers through SHOP generally isn’t individual coverage, so it doesn’t get the automatic HDHP treatment. It can still qualify the old way, by meeting the deductible and out-of-pocket limits.
The cap still counts. Under Q&A-20, an HSA can pay a membership priced over the limit, but the member can’t contribute to the HSA while enrolled in it.
And the membership doesn’t buy down the deductible. Q&A-16 says fees a member pays for a DPC arrangement don’t count toward the HDHP’s deductible or out-of-pocket maximum. A worker can pay the membership all year and stand exactly where they started on the bronze plan.
When the employer pays the fee
Some employers will skip the HSA route and pay the membership themselves. Q&A-18 covers that case from the HSA side: fees an employer pays, including through salary reduction under a section 125 cafeteria plan, can’t be reimbursed from the worker’s HSA. The IRS calls those payments compensation excluded from the worker’s income under section 106.
Folding the membership into the bronze plan is less settled. Q&A-15 states the general rule that an HDHP may not pay DPC fees before the deductible. A footnote then adds that bronze plans are treated as HDHPs “regardless of which services they cover before the deductible,” and that Treasury understands the Affordable Care Act lets qualified health plans provide coverage through a direct primary care medical home plan. The same footnote says the notice offers no interpretive guidance on that provision.
The question the notice leaves open
The notice never says what happens to an ICHRA that reimburses one thing besides premiums: the DPC membership.
Its HRA answer names premiums and stops there. Its answer on employer-paid fees is about HSA reimbursement, not about how an HRA is written. And on bronze plans that might fold a DPC medical home into the policy, it explicitly declines to interpret the law.
The IRS asked for comments on all aspects of the notice by March 6, 2026, so the gap was open for anyone to raise.
If you run a DPC practice and you’re pitching small employers this fall, you might find the cleanest version is the plain one built from pieces the notice answers one at a time: an ICHRA that pays only premiums, a bronze plan from the Exchange and a membership at or under the cap that the worker pays from the HSA. An ICHRA that also reimburses the DPC fee is a design the notice doesn’t address.
