Direct primary care for employers

Federal tax law on how DPC interacts with an HSA changed for months beginning after December 31, 2025. That is the main reason employers are asking about it now.

What it is

Section 71308 of Public Law 119-21 added Internal Revenue Code § 223(c)(1)(E). For HSA purposes, a "direct primary care service arrangement" is an arrangement under which an individual is provided medical care consisting solely of primary care services provided by primary care practitioners, and the sole compensation for that care is a fixed periodic fee.

Notice 2026-5 restates the statutory definition. A primary care practitioner, for this rule, means a physician with a primary specialty designation of family medicine, internal medicine, geriatric medicine, or pediatric medicine, or a nurse practitioner, clinical nurse specialist, or physician assistant, following the Social Security Act definition the statute uses. "Primary care services" for this rule do not include procedures that require general anesthesia, prescription drugs other than vaccines, or laboratory services not typically administered in an ambulatory primary care setting. Vaccines are permitted.

For months beginning after December 31, 2025, a DPC arrangement that meets that definition is not treated as a disqualifying health plan for HSA eligibility, so long as the aggregate monthly fees for all such arrangements with respect to the individual do not exceed $150, or $300 if the arrangement covers more than one individual. Qualifying fees may also be paid from an HSA. IRS Revenue Procedure 2026-24 states that those same $150 and $300 monthly figures still apply for calendar year 2027; the Code provides for inflation adjustment for months beginning after December 31, 2026, and the published 2027 amounts did not increase.

An arrangement that does not meet the definition — or that exceeds the monthly fee limit — can still be a DPC practice in the marketplace, but it is not the statutory arrangement that preserves HSA eligibility.

Who it fits

DPC can be a fit when the company wants employees to have a defined primary-care relationship for a fixed fee, and is prepared to offer it next to a medical plan that covers specialist, hospital, and other care. It is also a fit next to an HDHP, now that a qualifying arrangement no longer disqualifies HSA eligibility and the fee can be paid from the HSA.

It is not a substitute for a group medical plan, an ICHRA, or a QSEHRA. Telehealth may be one way a DPC practice delivers some visits; it is a method of access, not the same as the DPC arrangement itself.

How it works for employers

If you want to offer DPC, we will review the practice's agreement against the statutory definition and the monthly fee limit, confirm how the benefit will be offered and paid, and place it next to the medical plan or HDHP on the same proposal. Employees who have an HSA and who enroll in a qualifying arrangement can pay the fee from the HSA. Your tax advisor should confirm payroll and tax treatment for any employer contribution.

Availability of DPC practices varies by location. We will only recommend an arrangement we can describe accurately for your work sites, including Tampa Bay and other states where you have people.

How it compares

A group medical plan covers a broad set of services under insurance or self-funded plan rules. DPC covers a defined set of primary-care services for a periodic fee. Telehealth is a way to deliver a visit. An HSA is an account. Used together, a qualifying DPC arrangement and an HSA-qualified HDHP can be a coherent design. Used alone, DPC is not major medical coverage. We will not describe DPC as cheaper than insurance or as a replacement for it.