Can You Use an HSA with Direct Primary Care? What the Rules Say

A Health Savings Account, or HSA, is a tax-advantaged account that lets you set aside pre-tax dollars to pay for qualified medical expenses. Contributions reduce your taxable income, the money grows tax-free, and withdrawals for qualified expenses are also tax-free. That triple tax benefit makes HSAs one of the most powerful tools available for managing healthcare costs.

To open and contribute to an HSA, the IRS requires that you be enrolled in a High Deductible Health Plan, or HDHP, and have no other disqualifying coverage. The IRS sets the minimum deductible and maximum out-of-pocket limits for HDHPs each year. For 2024, the IRS defined an HDHP as a plan with a minimum deductible of $1,600 for self-only coverage or $3,200 for family coverage. You can confirm current thresholds at IRS.gov.

HSAs are not insurance. They are savings accounts tied to a specific type of insurance plan. That distinction matters a great deal when you start combining an HSA with a Direct Primary Care membership, because DPC memberships are also not insurance.

The IRS defines qualified medical expenses in Publication 502. To be HSA-eligible, an expense generally must be for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for treatments affecting any part or function of the body. A DPC membership fee is a flat monthly or annual charge that buys you access to a doctor, not a specific medical service. The IRS has historically treated such prepaid retainer-style arrangements as non-qualified expenses because the fee covers access rather than a discrete medical event.

The American Academy of Family Physicians has long advocated for legislation that would clarify HSA eligibility for DPC fees, recognizing that the current rules create a barrier for patients who want to use both tools together. As of this writing, no federal law has passed that changes the IRS treatment of DPC membership fees for HSA purposes. Patients should check IRS.gov and consult a qualified tax professional for the most current guidance, since tax law can change.

Using HSA funds to pay a DPC membership fee without clear IRS authorization could result in the withdrawal being treated as a non-qualified distribution, which would be subject to income tax plus a 20 percent penalty if you are under age 65. That is a meaningful financial risk worth taking seriously before you swipe your HSA debit card at a DPC practice.

Yes, in most cases you can still contribute to an HSA while belonging to a DPC practice, as long as you are also enrolled in a qualifying HDHP and meet all other IRS eligibility requirements. The DPC membership itself does not automatically disqualify you from HSA contributions. The key question is whether the DPC arrangement counts as a second health plan that provides coverage below the HDHP deductible threshold, which could disqualify you.

The IRS has issued guidance indicating that a DPC arrangement that provides only primary care services, and does not function as insurance or a health plan, generally does not disqualify a patient from HSA eligibility. IRS Notice 2023-37 addressed this in the context of certain healthcare arrangements and signaled a more favorable view of DPC-plus-HDHP pairings. However, the specifics matter, and not every DPC contract is structured the same way. Always review the terms of your DPC agreement and speak with a tax advisor before assuming your HSA eligibility is intact.

Many patients choose exactly this combination: a lean HDHP for catastrophic and specialist coverage, paired with a DPC membership for unlimited primary care access. The HDHP keeps HSA eligibility open, while the DPC membership handles the day-to-day care that would otherwise eat through a high deductible quickly. The membership fee comes out of pocket, but the overall cost picture can still be favorable compared to a low-deductible traditional plan with higher premiums.

Even though the DPC membership fee itself is generally not HSA-eligible, plenty of costs that arise alongside a DPC membership are. If your DPC doctor orders lab work, imaging, or a specialist referral, and you pay for those services separately out of pocket, those payments are typically qualified medical expenses you can cover with your HSA. Prescription medications, mental health visits, dental care, vision care, and many other services also qualify under IRS Publication 502.

This is where the combination of a DPC membership and an HSA can genuinely stretch your healthcare dollars. Your DPC membership covers the bulk of your primary care needs at a predictable flat rate. Your HSA then acts as a reserve for the less predictable costs, like a specialist visit, an MRI, or a prescription that falls outside what your DPC practice provides. You are not doubling up on coverage; you are layering two complementary tools.

Some DPC practices also offer in-house labs, generic medications, or minor procedures at low or no additional cost as part of the membership. Those services are already covered by your membership fee, so there is nothing extra to pay with your HSA. Ask your specific DPC practice what is included in the membership and what would be billed separately, so you can plan your HSA spending accordingly.

Congress has considered several bills over the years that would explicitly allow HSA funds to be used for DPC membership fees. The Primary Care Enhancement Act is one example that has been introduced in multiple sessions. As of this writing, no such bill has been signed into law. The AAFP and other primary care advocates continue to support legislative changes that would align HSA rules with the realities of how DPC practices operate.

Patients who want to stay current on this issue should monitor updates from the IRS at IRS.gov, the AAFP at aafp.org, and reputable health policy news sources. If the law changes, it could significantly improve the financial case for combining a DPC membership with an HSA-eligible HDHP. Until then, the safest approach is to treat the membership fee as an out-of-pocket expense and reserve your HSA for separately billed qualified medical expenses.

State-level rules can also vary. Some states have their own tax-advantaged health account rules that may treat DPC fees differently from the federal HSA framework. A tax professional familiar with your state's laws can help you understand whether any state-level benefit applies to your situation.

Start by confirming your HDHP qualifies under current IRS thresholds. You can find the annual limits on IRS.gov under Publication 969. Then review your DPC contract to make sure it is structured as a primary care access arrangement and not as a health plan or insurance product. If you are unsure, ask your DPC practice directly and bring the contract to a tax advisor.

Contribute the maximum allowed to your HSA each year if your budget allows. For 2024, the IRS set the contribution limit at $4,150 for self-only coverage and $8,300 for family coverage, with a $1,000 catch-up contribution allowed for those 55 and older. Maxing out your HSA builds a reserve you can use for the out-of-pocket costs that fall outside your DPC membership, like specialist visits, imaging, and prescriptions.

Keep clear records. Save receipts and explanations of benefits for every HSA withdrawal. If the IRS ever questions a withdrawal, documentation showing the expense was a qualified medical cost separate from your DPC membership fee is your best protection. A simple spreadsheet or a dedicated folder in your email for medical receipts goes a long way.

DirectMedicine is a directory of direct-pay, cash-pay, and Direct Primary Care practices across the United States. When you are researching whether a DPC membership makes financial sense alongside your HSA and HDHP, it helps to compare real practices side by side, including what each membership covers, how pricing is structured, and what services might be billed separately.

Because DPC practices vary in what they include, how they price memberships, and how their contracts are written, transparency matters. DirectMedicine surfaces that information so you can ask the right questions before you sign up, including whether the practice's membership agreement is structured in a way that preserves your HSA eligibility. No directory can give you tax advice, but having clear information about a practice's model helps you have a more informed conversation with your tax advisor.

Use DirectMedicine to find and compare DPC providers in your area, review what their memberships include, and reach out directly to ask about pricing and contract terms. Pairing that research with guidance from a qualified tax professional gives you the clearest picture of how a DPC membership fits into your overall healthcare and financial plan.