While proposed frequently in Congress over the past few years, the One Big Beautiful Bill Act (OBBBA) has succeeded in revising the rules governing health savings accounts (HSA) in key ways that allow them to be used to pay for direct primary care (DPC) arrangements. The new rules still impose important limitations and require regulations or guidance to be issued in the future.
We take a closer look at the new rules and their implications for the use of HSAs in connection with DPC arrangements.
DPC arrangements under state law
DPC arrangements are an alternative to traditional insurance, where patients pay a monthly membership fee that covers a defined set of primary care services. These arrangements may present regulatory issues, especially where a patient has other insurance or healthcare coverage.
In the past, regulators and payors raised concerns about whether the membership fee is considered a prohibited cost-sharing amount that overlaps with payments for healthcare services made by the applicable payor. Likewise, some state insurance agencies have challenged whether DPC arrangements are insurance arrangements for which a health maintenance organization certificate of authority or other insurance license is required.
Despite these concerns, most (but not all) US states have enacted laws or issued regulatory guidance favorable to or supportive of DPC arrangements. Some jurisdictions impose more onerous requirements (eg, licensure, mandatory contractual terms, and disclosures) than others. The legality of a DPC arrangement or a particular structure for the arrangement varies greatly from state to state. Those looking to establish and operate a DPC arrangement are encouraged to ensure that the arrangement complies with the laws of each applicable jurisdiction.
DPC arrangements under current federal law
The OBBBA removes key roadblocks that DPC arrangements have faced under federal law.
Before the OBBBA, DPC arrangements could not be paired with HSAs. This meant that anyone covered under a high-deductible health plan (HDHP) with an HSA could be disqualified from contributing to that HSA if they participated in a DPC arrangement.
Additionally, HSAs could not be used to pay the DPC membership fees. Federal tax law expressly prohibited using HSA funds to purchase health insurance, which included DPC membership fees prior to the OBBBA. The DPC membership fees were thus considered ineligible HSA expenses.
Essentially, prior to the OBBBA, anyone signing up for a DPC arrangement had to consider its impact on their contributions to an HSA and had to pay their DPC membership fee separately from their HSA funds.
OBBBA’s changes for DPC arrangements
Effective December 31, 2025, the OBBBA makes two key changes to federal tax law governing HSAs for DPC arrangements.[1]
1. The OBBBA eliminates the disqualification issue for individuals contributing to an HSA and participating in a DPC arrangement
While the rules defining an individual eligible to contribute to an HSA have not changed,[2] the OBBBA clarifies that a DPC arrangement will not be treated as a health plan with respect to those eligibility rules. This means that an individual may contribute to an HSA even when participating in a DPC arrangement.
This carve-out, however, places limits on the types of DPC arrangements that qualify for the exclusion. If the services or fees for an arrangement exceed these limits, it is possible that the DPC arrangement could still be considered a health plan and may disqualify its members from contributing to HSAs. Specifically, the arrangement must provide solely “primary care services” by “primary care practitioners,” and the sole compensation for this care must be a fixed periodic fee. Even if an arrangement meets these criteria, it may be considered a health plan if the aggregate fees for all direct primary care service arrangements for a particular individual exceed USD150 in a month (or USD300 in the case of an individual with any DPC service arrangement covering more than one individual), adjusted for inflation.
Although the OBBBA defines “primary care services arrangement” broadly to include “medical care” (as defined by 26 U.S.C. 213(d)) provided by primary care practitioners, the OBBBA does not define “primary care services.” However, the following are expressly excluded from being treated as primary care services:
- Procedures requiring general anesthesia
- Prescription drugs (other than vaccines), and
- Certain laboratory services.
Arrangements that exceed the fixed periodic fee limits or include excluded services will not qualify for the HSA carve-out and may disqualify members from contributing to HSAs.
2. The OBBBA now allows HSA funds to be used to pay for DPC membership fees
Under the changes, expenses for coverage under a DPC arrangement (as defined by the new rules) are expressly carved out from the prohibition on using HSA funds to purchase health insurance.
Next steps for DPC arrangements
The OBBBA has significantly changed the federal tax regulatory framework for patients looking to join a DPC arrangement and to leverage their HSAs to cover the membership fees. Yet, regulatory pitfalls remain.
Only certain arrangements will qualify under the new rules. Any non-primary care service offerings or fees in excess of the stated limits could cause a DPC arrangement to fall outside of the rules. That could result in serious tax consequences for the DPC arrangement’s members.
At the same time, the Internal Revenue Service (in consultation with the US Department of Health and Human Services) has been directed to promulgate rules or other guidance. Those rules or guidance could potentially further impact the compliance requirements for DPC arrangements.
Nothing in the OBBBA changes the complex state regulatory framework described above. DPC arrangements remain subject to any licensing or other regulatory requirements imposed by its applicable jurisdictions, including laws governing marketing efforts.
Providers operating DPC arrangements are encouraged to carefully assess the impact of those arrangements on their contracts with any payors covering any of their DPC members.
[1] These changes apply only to DPC arrangements and HSA payments made on or after December 31, 2025. Arrangements entered into, or HSA payments made before December 31, 2025, remain subject to the prior law, under which participating in a DPC arrangement constituted disqualifying coverage rendering an individual ineligible to contribute to an HSA, and HSA funds could not be used to pay DPC membership fees.
[2] These HSA eligibility requirements include coverage under an HDHP with minimum annual deductibles of USD1,650 for individual coverage, or USD3,300 for family coverage in 2025.
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