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Direct Primary Care and HSAs: The $150 Monthly Rule

Short answer: Under section 223(c)(1)(E) (added by Public Law 119-21), a direct primary care service arrangement (DPCSA) is not treated as a health plan that disqualifies you from HSA contributions if the aggregate monthly fees for all your DPCSAs are no more than $150 ($300 if a DPCSA covers more than one individual). It applies to months beginning after December 31, 2025. The amounts are inflation-adjusted for months after December 31, 2026; Rev. Proc. 2026-24 gives $150 and $300 for 2027.

What qualifies (Notice 2026-5)

• Sole compensation is the fixed periodic fee (Q&A-11): an arrangement that charges a membership fee but also bills separately for items and services isn't a DPCSA.
• Billing periods: fees can be billed for periods longer than a month, up to a year, if fixed, periodic and within the monthly limit on an annualised basis (A-13). For 2026 the notice gives examples: $1,800 a year, $900 for six months, $450 for three months for a single person.
• Services: primary care services by primary care practitioners; excludes procedures requiring general anesthesia, prescription drugs other than vaccines, and lab services not typically administered in an ambulatory primary care setting (A-17, A-20).
• Terms decide, not usage (A-14).

Paying DPCSA fees from an HSA

• DPCSA fees can be qualified medical expenses reimbursable from an HSA, with no specific fee limit for that purpose (A-20), and an HSA can treat the expense as incurred on a pro-rata monthly basis, the first day of the coverage period, or the payment date (A-19).
• Fees paid by your employer, including through a section 125 cafeteria plan salary reduction, are not reimbursable from your HSA (A-18).
• Your HDHP can't offer DPCSA membership before the deductible (A-15), and DPCSA fees don't count toward your HDHP deductible or out-of-pocket maximum (A-16).

Practical checklist

1. Confirm the monthly fee and whether anything is billed separately.
2. Add up fees for all DPCSAs you or your family members have.
3. Keep receipts and records.
4. Confirm with a tax professional if your arrangement includes labs or drugs.

FAQ

Does the $150 cap apply to HSA reimbursement? No; the cap is for the "not a health plan" rule (A-20).

Is the cap adjusted? For months after 2026, yes; 2027 is $150/$300 per Rev. Proc. 2026-24.

What we could not verify

• How a particular DPC practice structures its fees.
• State rules.

Sources (official)

• IRS, Notice 2026-5 (OBBBA changes: bronze/catastrophic plans, telehealth, direct primary care) — https://www.irs.gov/pub/irs-drop/n-26-05.pdf (read October 17, 2026)
• IRS, Rev. Proc. 2026-24 (2027 HSA, HDHP, DPCSA and HRA amounts) — https://www.irs.gov/pub/irs-drop/rp-26-24.pdf (read October 17, 2026)

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Not tax/financial advice. Examples use made-up figures and have not been reviewed by a tax professional. See the disclosure.