Can Patients Use an HSA for Direct Primary Care? The $150 Rule for 2026 and 2027, Explained

Yes. Since January 2026, a patient can belong to a direct primary care practice and still contribute to a health savings account, and can pay the membership fee from that HSA tax-free, as long as the membership costs no more than $150 a month for one person or $300 a month for a family. The rule comes from the One Big Beautiful Bill Act, and the IRS explains how it works in Notice 2026-5.

The caps are where practice decisions start. The IRS confirmed in Revenue Procedure 2026-24 that they stay at $150 and $300 for 2027, and many direct-care practices price their adult memberships above $150. This guide covers what the rule says, what a practice controls, and how to set up plans and receipts so HSA-holding patients get the benefit. It is a summary of published IRS guidance, not tax advice; check your own plan design with a tax advisor.

What changed for HSAs and direct primary care in 2026?

Before 2026, the IRS treated a direct primary care membership as a health plan that pays for care before the deductible is met. A patient with a high-deductible health plan who joined a DPC practice could no longer contribute to an HSA, and HSA money generally could not pay the membership fee.

The new law changes both. A qualifying direct primary care arrangement is no longer treated as a health plan for HSA eligibility, so membership does not stop contributions. And its fees count as a qualified medical expense, so the patient can pay them from the HSA without tax. The change applies to months starting in January 2026.

What counts as a direct primary care arrangement under the new rule?

Notice 2026-5 sets four conditions. The arrangement qualifies only when all four hold:

• Primary care practitioners. Care comes from physicians whose primary specialty is family medicine, internal medicine, geriatric medicine or pediatrics, or from nurse practitioners, clinical nurse specialists or physician assistants.
• Primary care services only. The membership cannot include procedures that need general anesthesia, prescription drugs other than vaccines, or lab services not typically done in an ambulatory primary care setting.
• A fixed periodic fee is the only payment. If the practice gives members certain items or services only because they are members, and then bills for them separately, through insurance or otherwise, the arrangement does not qualify (Q&A 11). Offering services to members and non-members alike and billing both for them is allowed (Q&A 12).
• The fee stays under the cap. Total fees for all such arrangements covering a person cannot exceed $150 a month, or $300 a month when the arrangement covers more than one person.

The terms of the membership decide whether it qualifies, not what a patient uses. A member cannot skip an excluded service and treat the plan as qualifying (Q&A 14).

What happens if a membership costs more than $150 a month?

The patient can still pay it from an HSA, but cannot contribute to the HSA while enrolled. Notice 2026-5 is explicit that a direct primary care fee above the monthly limit is still a medical expense an HSA can reimburse, while the member loses eligibility to make new HSA contributions for as long as they stay enrolled.

For a patient who has built up an HSA balance, that can still be a good trade. For one who relies on yearly contributions and the tax deduction that comes with them, it usually is not. This is the conversation a practice priced above the cap should be ready to have during open enrollment.

Can members pay quarterly or annually and still qualify?

Yes, for periods up to a year, as long as the fee works out to no more than the monthly limit. The IRS gives the 2026 examples directly: $1,800 a year, $900 for six months, or $450 for three months for one person (Q&A 13). An HSA can also reimburse a fee paid in advance, so a member who prepays in December for a membership that starts in January can be reimbursed straight away (Q&A 19).

Does the rule apply when an employer pays for the membership?

Partly. An employer can sponsor direct primary care for its staff, but the employee cannot then reimburse themselves from an HSA for fees the employer paid, including fees paid through a cafeteria plan salary reduction (Q&A 18). A high-deductible plan also cannot add a direct primary care membership as a benefit before the deductible is met (Q&A 15). Practices with employer contracts should walk the employer's benefits adviser through both points before renewal.

What should a direct-care practice do about its pricing?

Four steps cover most practices:

1. Check each tier against the caps. Look at the monthly equivalent of every adult seat and every family price, including quarterly and annual cycles.
2. Decide whether to offer a qualifying tier. A practice that prices its core membership above $150 can add a primary-care-only tier under the cap for HSA holders and keep its existing plan for everyone else.
3. Review what is bundled and what is billed separately. In-house dispensing, discounted labs and procedures are where the "fixed fee only" and "primary care services only" conditions bite. Take the list to your tax advisor with Q&A 11 and 12 in hand. The notice does not address one-time enrollment fees, so raise those too.
4. Tell members plainly. A short note at open enrollment saying whether each plan is under the cap saves the front desk dozens of calls.

The IRS defined "primary care services" by listing exclusions rather than codes, and asked for public comments on the whole notice, so more detailed guidance may follow. Recheck plan design when it does.

What receipts do HSA members need?

An HSA administrator generally asks for proof of the date, the service, the amount paid and the patient. For a membership, a paid invoice that names the plan and the coverage period usually does the job. Some administrators ask for an itemized statement with diagnosis and procedure codes, which is what a superbill provides.

How does SigmaMD handle HSA-friendly memberships?

In SigmaMD, membership plans are built from seats, each with its own age range and a price for every charging cycle the practice offers, so an individual tier under $150 a month and a quarterly or annual option priced at the same monthly rate sit in one plan. A price cap sets one flat price per cycle for the whole membership regardless of how many people are enrolled, which is how a practice holds a family plan at $300 a month. Seat prices can be changed on a plan that already has members, and the new price applies from each member's next billing cycle, without re-enrolling anyone.

On the payment side, members can pay with an HSA or FSA card like any other card. Each plan can carry its own name and description on invoices, so the invoice says what the fee covers. Paid invoices download as PDFs from the patient's Payments page, and patients can download their own from the SigmaMD patient app. When an administrator wants codes, the practice turns on the superbill option on the invoice and adds ICD-10 and CPT codes to each item.

The rest of the visit runs in the same system. SigmaMD Scribe drafts the visit note from the conversation, which matters more when a lower-priced tier brings in more members, and Sigma AI gives the clinician a one-click summary of what has changed in the chart since the last visit, with every answer linked back to the record it came from.

For more on running a membership practice, see our guide to what direct care is and how it works, how to choose an EMR for a direct primary care or concierge practice, and how to keep employer eligibility files accurate. To see a family plan capped at $300 and an HSA-ready invoice on a live account, book a demo of SigmaMD.