Section 71308 of the Senate amendment to H.R. 1 (the “Big Beautiful Bill”), ensures that Direct Primary Care (DPC) arrangements—often offered by a range of primary care providers—will not jeopardize an HDHP's tax-qualified status. Plus, members can use HSA funds to pay for these services.

Background: What is Direct Primary Care?

DPC is a membership model where individuals pay a fixed monthly fee for primary care services—bypassing insurance co-pays for routine care like wellness visits, chronic condition management, and same-day appointments. Traditionally, HDHPs with HSAs could not cover DPC fees without risking their tax-preferred structure.

Section 71308 Explained

Per the bill’s legislative text, DPC arrangements are not treated as a health plan for HDHP requirements under IRC § 223(c)(1)(A)(ii). A 'Direct primary care service arrangement' is defined as a periodic-fee model offering primary care only, up to a monthly cap of $150 per person ($300 for family plans).

Eligible providers include MDs, DOs, dentists, podiatrists, optometrists, chiropractors, nurse practitioners, and physician assistants, as long as they operate within state scope-of-practice rules. Chiropractors are limited to manual spinal manipulation for subluxation.

DPC fees are now explicitly classified as medical expenses under IRC § 223(d), making them eligible for payment from HSAs. This applies to months beginning after December 31, 2025.

Why It Matters for Employers and Plans

1. Strategic benefit expansion: DPC improves access to personalized care and supports preventive health—now it can complement HDHPs and HSAs without compliance risk.

2. Broader provider network: A diverse set of clinicians can participate in employer-sponsored DPC models, provided they are licensed under state law.

3. Consumer financial flexibility: Members can use HSA funds to pay DPC fees, extending tax-advantaged savings to routine primary care.

4. Cost control: The $150/month cap helps employers budget predictably while the exclusion of specialty services ensures DPC stays focused on core primary care.

Recommendations for Stakeholders

Employers & Sponsors

• Consider adding or enhancing DPC as an HDHP benefit.

• Verify participating providers meet state licensure standards.

• Cap fees at or below the $150/$300 thresholds (subject to inflation after 2026).

• Consider integrating your employee wellness program with the Direct Primary Care Services Arrangement to enhance care continuity and engagement.

Health Plans & TPAs

• Modify plan documents and SPDs to account for DPC exclusions.

• Communicate clearly how members can use HSAs to pay for monthly DPC fees.

Care Providers

• Clarify service offerings qualify as primary care per CMS / SSA definitions.

• Structure membership fees to stay within fixed periodic limits and confirm inclusion under employer-sponsored HDHP designs.

Resources

• Senate Amendment Text (Section 71308): https://www.congress.gov/bill/119th-congress/house-resolution/492

Bottom Line

Section 71308 removes the long-standing barrier between Direct Primary Care and HDHP/HSA compatibility, enabling employers, patients, and providers to integrate proactive, membership-based primary care without losing tax benefits.

*Disclaimer: This article is informational and not legal or tax advice. For a formal review or plan-document confirmatory policy, consider having a benefits attorney review your documents. Please contact Wellness Law, LLC for assistance.