For years, direct primary care had a quiet tax problem. Patients with a high-deductible health plan and a health savings account (HSA) worried that joining a DPC practice could cost them the right to contribute to that account. On January 1, 2026, that changed. Direct primary care, the model where patients pay a primary care practice a flat membership fee instead of having visits billed to insurance, can now sit alongside an HSA, as long as the membership is designed within the rules.
That shift makes DPC more interesting to founders than it has been in a long time, especially those building virtual care. Most of what a DPC membership promises (quick access, unhurried conversations, ongoing follow-up) is the kind of care telehealth already does well. It's also one of the cleanest healthcare business models to finance, because revenue comes in predictable monthly payments rather than insurance claims that may or may not be paid.
The Model in Plain Terms
A DPC practice sells a membership. For a fixed fee, usually charged monthly, members get access to a defined set of primary care services: visits, messages with their clinician, follow-up on chronic conditions, preventive care, and help coordinating care elsewhere. The practice doesn't send claims to insurance for anything the membership covers. Anything outside that, such as medications, many labs, imaging, specialists, or hospital care, is either priced separately or covered by the patient's other insurance.
The economics drive everything else. A traditional practice earns more by seeing more patients, which pushes visit times down. A DPC practice earns the same fee whether a member visits once a year or once a month, so it tends to run smaller panels and spend more time per patient. Its admin load is lighter, too, since there are no claims, denials, or payer contracts for membership services. It's a form of the cash-pay telehealth model, with the subscription built into the care itself.
People often lump DPC in with concierge medicine, but they're different. A concierge practice usually charges a membership fee and keeps billing insurance for visits. In direct primary care, the membership is the payment. That distinction matters for pricing, for how you explain the offer to patients, and, since 2026, for HSAs.
What the 2026 HSA Change Actually Says
According to the IRS, under the One, Big, Beautiful Bill, "Beginning Jan. 1, 2026, an otherwise eligible individual enrolled in certain direct primary care (DPC) service arrangements may contribute to an HSA," and those individuals "may use their HSA funds tax-free to pay periodic DPC fees." The details are in an IRS news release and in IRS Notice 2026-05.
The word "certain" is doing a lot of work. The notice sets four conditions an arrangement has to meet:
- It consists "solely of primary care services provided by primary care practitioners."
- The only compensation is "a fixed periodic fee."
- The aggregate fees for an individual don't, "for a month, exceed $150." The limit is $300 for an arrangement covering more than one person, and both figures adjust for inflation after 2026.
- The services don't include procedures that require general anesthesia, prescription drugs other than vaccines, or lab services not typically administered in an ambulatory primary care setting.
The same law also made permanent the ability to receive telehealth and other remote care before meeting a high-deductible plan's deductible, for plan years beginning on or after January 1, 2025. That's a separate rule from the DPC provision, but both point in the same direction: federal policy is making room for virtual and membership-based care alongside HSAs.
Tax rules apply person by person, so this is a framework for designing your offer, not advice for any individual patient. Have a tax advisor review your membership terms before you market HSA compatibility.
Designing a Membership Around the Rules
If HSA compatibility is part of your pitch, the IRS conditions shape the product.
Start with price. A membership above $150 a month for an individual falls outside the definition. Many DPC practices already price below that, but a virtual program that bundles extras can drift past it without anyone noticing.
Then look at what's inside the fee. Prescription drugs, other than vaccines, aren't primary care services under the notice. A membership that quietly includes medication in its flat price is the most common way to break the definition. Keep medications as a separate purchase. The same goes for advanced labs: basic primary care testing can sit inside the membership, while anything beyond it should be priced on its own.
Finally, watch the language. Whether a particular member can contribute to an HSA depends on the rest of their coverage, which you can't see. "Members may be able to use HSA funds" is accurate. "HSA-eligible" as a blanket promise is not.
Writing all of this into the membership agreement does double duty. It keeps the arrangement inside the IRS definition, and it heads off the most common billing dispute in DPC: a member who assumed something was included that wasn't.
A Sample Virtual DPC Membership
To make this concrete, here's how a founder might structure a virtual DPC offer with HSA compatibility in mind. The prices are illustrative.
| Included in the membership ($99/month) | Sold separately |
|---|
| Visits | Unlimited video visits with the member's primary care clinician | In-person procedures |
| Messaging | Secure messaging with a same-business-day response target | |
| Ongoing care | Chronic condition follow-up, preventive visits, care coordination | Specialist and hospital care (other coverage) |
| Testing | Basic point-of-care or at-home screening | Advanced lab panels through a lab partner |
| Medications | Prescribing and refill management by the clinician | The medications themselves |
The design choices follow the IRS conditions. The fee is fixed and stays under $150 a month for an individual. The membership covers primary care from primary care practitioners. Medications are prescribed inside the membership but purchased outside it, so the flat fee doesn't include prescription drugs. Advanced labs are priced separately.
A family version would follow the same logic but at a higher fee, as long as the total arrangement stays within the $300 monthly limit for more than one person.
Founders tend to trip over the same few things. They bundle medication into the fee to make the offer look simpler, which breaks the HSA definition. They promise response times the provider team can't keep once membership grows. They expand into new states before licensing is in place. And they treat cancellation as something to discourage rather than something to make easy. That last one damages trust faster than almost anything else in a membership business.
What Changes When DPC Moves Online
A virtual DPC practice keeps the membership and moves most of the care onto video and messaging. A few things work differently once the clinic walls are gone.
Licensing Follows the Patient
A clinician generally has to be licensed in the state where the patient is at the time of care. A storefront practice serves its neighborhood. A virtual one can enroll members anywhere, which means it needs licensed providers in every state it sells into. Our breakdown of which states allow telehealth across state lines covers the options. For most new brands, starting with a handful of states and expanding is easier than launching nationwide.
State law can add another layer. Many states have rules on how state insurance law treats direct primary care agreements and what they must disclose. Check each launch state before you enroll members there.
Access Is the Product
Members join DPC for access, so response time is the promise you're really selling. Live video handles new concerns and longer conversations. Asynchronous telehealth, such as secure messages and structured check-ins, is where most follow-ups and refill questions belong. A practice that answers messages within hours, not days, will keep members. One that doesn't will lose them, no matter the cost.
Some Care Still Happens in Person
Blood draws, physical exams, and procedures don't go virtual. Plan for them from the start, with lab partners, at-home test kits where appropriate, and clear referral paths. Members forgive a referral much more easily than a dead end.
Billing Is the Business
A missed membership payment is lost revenue, and a confusing renewal is a support ticket. Recurring billing needs reliable retries, clear renewal and cancellation terms, and receipts members can actually use. Our guide to the patient payment platform explains why healthcare subscriptions need more than a generic checkout. For anything sold outside the membership, members are self-pay patients, so the good faith estimate rules apply to scheduled services. Some members will also ask for a superbill to seek out-of-network reimbursement.
This is where the platform underneath matters most. Bask gives brands integrated doctor networks on every plan, live and asynchronous visits with customizable treatment pathways, and payment processing that accepts credit, debit, and HSA/FSA cards. Brands can also sell prescription medications, OTC products, and devices outside the membership from the same storefront.
Is DPC the Right Model for Your Brand?
DPC rewards patience. Revenue builds one member at a time and depends on keeping those members month after month, so the model suits founders who are comfortable growing steadily rather than spiking on launch-day sales. It works best when you can answer a few questions clearly.
Who is your member, and why would they pay a monthly fee instead of using their insurance for primary care? What exactly does the membership include, and what does it leave out? Can you staff licensed providers in your launch states with the response times you plan to promise? And how will you handle the care that has to happen in person?
If those answers come easily, the 2026 rules give you a tailwind that DPC practices didn't have before. If they don't, a narrower program, such as membership-based care for a single condition or population, may be a better first step. Our guide on starting a telemedicine business walks through those early decisions.
FAQs
Is direct primary care the same as concierge medicine?
No. Concierge practices usually charge a membership fee on top of billing insurance for visits. In direct primary care, the membership fee covers the services.
Can patients use an HSA to pay for direct primary care?
Starting January 1, 2026, the IRS says that otherwise eligible individuals in qualifying DPC arrangements may contribute to an HSA and use HSA funds tax-free for periodic DPC fees. The arrangement has to meet IRS conditions, including a $150 monthly limit for an individual ($300 for more than one person), adjusted for inflation after 2026.
Do DPC members still need health insurance?
Generally, yes. A DPC membership covers primary care. Members need separate coverage for specialists, emergencies, hospital stays, and other services outside the membership.
Can direct primary care be delivered entirely online?
Much of it can be delivered online, including visits, messaging, follow-ups, and prescription management. Providers must be licensed in each member's state, and the practice still needs a plan for labs, exams, and procedures that require an in-person visit.
Where to Start
Direct primary care is an old idea that fits new technology unusually well, and the 2026 HSA change has removed one of its biggest obstacles. The work is in the design: a clear membership, a price within the IRS limits, providers licensed where your members live, and billing that runs without anyone thinking about it. If you're weighing a virtual DPC launch, compare Bask's plans to see what's included from day one.
References
- Internal Revenue Service. (2025). Treasury and IRS provide guidance on new tax benefits for health savings account participants under the One, Big, Beautiful Bill. https://www.irs.gov/newsroom/treasury-irs-provide-guidance-on-new-tax-benefits-for-health-savings-account-participants-under-the-one-big-beautiful-bill
- Internal Revenue Service. (2025). Notice 2026-05. https://www.irs.gov/pub/irs-drop/n-26-05.pdf
