New Federal Policy Allows HSAs to Cover Direct Primary Care Memberships

A significant change in federal policy set for 2026 will soon allow Health Savings Accounts (HSAs) to cover Direct Primary Care (DPC) memberships, overcoming past regulatory compliance requirements and encouraging broader adoption by patients and employers.

This policy update results from the One Big Beautiful Bill Act, signed into law on July 4, 2025. The legislation officially classifies Direct Primary Care memberships as eligible medical expenses under HSA regulations, effective January 1, 2026. It confirms that participation in a qualifying DPC arrangement does not interfere with HSA contributions, provided participants are covered by a qualified High-Deductible Health Plan (HDHP).

Industry stakeholders recognize this adjustment as a significant development in primary care delivery and health plan structuring by employers. Collin Blanchard, Director of Growth and Population Health Management at SALTA Direct Primary Care, remarked, "The federal government's acknowledgment of DPC as an HSA-eligible expense enables patients and employers to optimize tax-advantaged savings with a model focused on access and preventive care."

Previously, federal tax regulations posed challenges for combining Direct Primary Care with HSA-eligible plans. Earlier IRS guidance erroneously classified DPC memberships as "other coverage," potentially disqualifying individuals from HSA contributions, despite DPC not replacing traditional insurance. This impacted employer and benefits advisor recommendations, even as interest in the model grew.

The updated policy explicitly recognizes DPC memberships as qualified medical expenses, allowing individuals with HDHPs to maintain HSA eligibility. It sets maximum monthly DPC membership fees eligible for HSA use at $150 for individuals and $300 for families, subject to inflation adjustments.

The DPC model, which charges a flat monthly fee directly to physicians for comprehensive primary care, has become popular among employers seeking alternatives to high healthcare costs and limited access. By not relying on insurance for routine visits, DPC practices can maintain smaller patient lists, enabling same-day or next-day appointments and enhanced chronic care management.

The revamped HSA compatibility is encouraging more employers to consider DPC-based health benefits, integrating HDHPs with employer-backed DPC memberships. For employers, the model offers potential cost savings by redirecting routine care from urgent or emergency settings while enhancing physician access. For patients, the 2026 regulation change allows the use of HSA funds for DPC fees, providing flexibility to choose care models that prioritize physician accessibility and proactive engagement in prevention.