Direct Primary Care Arrangement Fees: FSA Eligibility

What is a Direct Primary Care Arrangement?

The Direct Primary Care (DPC) model is a practice and payment model where patients/consumers pay their physician or practice directly in the form of periodic payments for a defined set of primary care services. DPC practices typically charge patients a flat monthly or annual fee, under terms of a contract, in exchange for access to a broad range of primary care and medical administrative services. The DPC practice framework includes any practice model structured around direct contracting with patients/consumers for monthly or annual fees which serve to replace the traditional system of third party insurance coverage for primary care services (aafp.org). Under a DPC agreement you typically gain broader access to your physician (longer visits, telehealth, direct communication) in exchange for leaving the “fee-for-service/insurance-mediated primary care” model behind.

The membership fees for a DPC arrangement are the periodic payments (often monthly) that you pay to the provider for access to those primary-care services. For example, one sample agreement lists a monthly charge of $89 for a primary member, $69 for a spouse, $29 for dependents, and $216 for a family. (Exemplar Care) These membership fees may cover “unlimited” or broad primary care visits, telemedicine, basic labs, management of chronic conditions, and so on (depending on the agreement), but they typically do not cover specialist care, hospitalization, major surgery, advanced imaging, or many prescription drugs unless specifically included. American Academy of Family Physicians The value proposition is predictable cost, closer doctor-patient relationships, faster access, and potentially fewer visits to high-cost settings. Historically, DPC membership fees were not eligible HSA expenses and having a DPC agreement could interfere with your eligibility to contribute to an HSA because the IRS considered the arrangement as paying for health insurance. However, under recent legislative changes, the rules change beginning with months after December 31, 2025. Specifically:

• An individual enrolled in a DPC arrangement will not be automatically disqualified from HSA eligibility just because of the membership fee, provided the fee does not exceed $150 per month for an individual, and $300 for a family arrangement.
• The membership fees for qualifying DPC arrangements are treated as eligible medical expenses for HSA distributions—i.e., you may use HSA dollars tax-free to pay the fees regardless of the amount of the monthly fee and whether it allows you to continue to contribute to an HSA.
• To officially be a DPC arrangement, it must meet certain criteria (e.g., the provider offers only primary care services for a fixed periodic fee; certain excluded services like procedures requiring general anesthesia, prescription drugs (other than vaccines), and certain labs may disqualify it.