Picture this: you pay your family doctor a flat $150 a month, walk into the office without a copay, text her at 9 p.m. when your kid spikes a fever, and never see an insurance claim form. Until January 1, 2026, that very arrangement could disqualify you from contributing to a Health Savings Account. Starting in 2026, it does the opposite—it works with your HSA, and you can even pay the membership fee out of your HSA tax-free.
That is the practical upshot of the One Big Beautiful Bill Act (OBBBA), enacted July 4, 2025, and the IRS's implementing guidance in Notice 2026-05 released in December 2025. If you are a freelancer, a solo S-corporation owner, a small employer trying to offer real benefits without a group plan, or a household just shopping the marketplace this open enrollment, the rules of the game just changed. Here is what you need to know to use them.
Why Direct Primary Care and HSAs Used to Be Incompatible
Direct Primary Care (DPC) is a membership model. You pay a flat monthly fee—often $50 to $150 per adult—directly to a physician or clinic, and in exchange you get unhurried visits, same-day appointments, basic in-office labs and procedures, and direct messaging access. No copays, no claims, no insurance middleman.
DPC pairs naturally with a high-deductible catastrophic insurance plan: you handle routine care with the membership, and the insurance is there for the surgery, the ER visit, the cancer diagnosis. It is the kind of stacked coverage that fits the way self-employed people actually use the system.
The problem, until 2026, was tax law. To contribute to an HSA, you had to be enrolled in a qualifying high-deductible health plan (HDHP) and have "no disqualifying other coverage." The IRS had long treated DPC memberships as a form of "other health coverage" because they pre-paid for medical services outside the deductible. A patient with both a DPC arrangement and an HDHP was technically not HSA-eligible. Many DPC patients only learned this at tax time, after they had already contributed.
Section 71308 of OBBBA fixed that. As of January 1, 2026, a qualifying DPC arrangement is explicitly disregarded for HSA eligibility purposes. You can have both, contribute to your HSA, and pay the DPC fee from the HSA itself.
The Three OBBBA Changes That Matter for HSA Users
Notice 2026-05 implements three distinct HSA expansions. Each one helps a slightly different audience.
1. Direct Primary Care Is HSA-Compatible
A DPC arrangement no longer disqualifies the patient, provided it meets four conditions:
- The services consist solely of primary care provided by primary care practitioners
- The patient pays a fixed periodic fee (monthly, quarterly, or annual)—no per-visit charges, no fee-for-service add-ons
- The aggregate cost across all DPC arrangements stays at or below $150 per month for an individual and $300 per month for a family (2026 amounts, indexed for inflation in later years)
- The arrangement does not include excluded services
The excluded services list is narrow but specific: no procedures requiring general anesthesia, no prescription drugs other than vaccines, and no laboratory services not typically administered in an ambulatory primary care setting. In practice, this means a DPC that does routine in-office labs, wellness visits, suture removal, joint injections, and vaccines is fine. A clinic that bundles in outpatient surgery or ongoing specialty pharmacy coverage is not.
The fee cap is aggregate. If you have DPC A at $100/month and DPC B at $75/month, your total of $175 exceeds the $150 individual cap—both arrangements are disqualifying. Pick one or stay under the limit.
You can also reimburse DPC fees from your HSA, treating them as qualified medical expenses. This is meaningful: a $1,800-per-year membership ($150 × 12) becomes a fully tax-deductible medical cost when paid through the HSA.
2. Bronze and Catastrophic Marketplace Plans Are Now HSA-Eligible
Historically, only a plan formally labeled an HDHP—meeting the IRS minimum deductible and maximum out-of-pocket thresholds—could pair with an HSA. Many ACA Bronze plans came close but failed on technicalities, and Catastrophic plans (available to people under 30 or with hardship exemptions) almost never qualified.
OBBBA reclassifies all Bronze and Catastrophic plans available through an Exchange (and off-Exchange Bronze plans that are "substantially the same") as HSA-compatible, regardless of whether they hit the traditional HDHP numbers. Industry estimates suggest about 7.3 million additional Americans now have access to HSA contributions.
For 2026, the standard HDHP and HSA contribution numbers still apply for plans that qualify the traditional way:
- HSA contribution limit: $4,400 self-only, $8,750 family
- Catch-up contribution (age 55+): $1,000 additional
- HDHP minimum deductible: $1,700 self-only, $3,400 family
- HDHP maximum out-of-pocket: $8,500 self-only, $17,000 family
If you enroll in a Bronze or Catastrophic plan, those plans qualify you for HSA contributions even when they would not meet the deductible or out-of-pocket thresholds above.
3. The Telehealth Pre-Deductible Safe Harbor Is Permanent
During the pandemic, Congress allowed HDHPs to cover telehealth and remote care services before the patient hit the deductible without breaking HSA eligibility. That safe harbor expired and was renewed several times. OBBBA made it permanent for plan years starting January 1, 2025, and later.
In plain English: your HDHP can pay for a $25 virtual urgent care visit, a mental health video session, or a remote chronic-care check-in, and you still qualify to contribute to your HSA. This matters most for people who would otherwise have hesitated to use telehealth out of fear of disqualification.
How Different Filers Should Think About This
The same rule book applies differently depending on how you are organized for tax purposes.
Freelancers and Sole Proprietors
If you file Schedule C, you have always been able to deduct health insurance premiums above the line on Form 1040 (the self-employed health insurance deduction). What changes in 2026 is that you can now pair a Bronze marketplace plan with a DPC arrangement and an HSA simultaneously. Practical playbook:
- Pick a Bronze (or Catastrophic, if eligible) marketplace plan during open enrollment
- Sign up for a DPC at $150/month or less
- Open or continue contributing to your HSA up to $4,400 self-only or $8,750 family
- Pay the DPC membership through your HSA debit card—those fees are now qualified medical expenses
The self-employed health insurance deduction still covers the Bronze plan premium. The DPC fee is not deductible as insurance, but it is reimbursable from the HSA tax-free, and HSA contributions remain above-the-line deductions on Schedule 1.
Solo S-Corporation Owners
This group has a perpetually awkward relationship with employer-sponsored health benefits. A more-than-2% S-corp shareholder is treated as self-employed for fringe-benefit purposes—you cannot participate in your own company's QSEHRA or ICHRA. The standard workaround is the S-corp self-employed health insurance procedure: the corporation pays the premiums, includes them in your W-2 wages (subject to income tax but not FICA), and you deduct them on your personal return.
DPC fits this structure cleanly. The S-corp can pay the DPC membership and add it to your W-2 the same way it handles health insurance premiums, and you can still contribute to your HSA personally. Or you can keep it simple: pay the DPC out of pocket from your HSA and let the corporation handle only the insurance premium.
Small Employers (Under 50 Employees)
Small employers have two tax-advantaged HRA structures available: the Qualified Small Employer HRA (QSEHRA) and the Individual Coverage HRA (ICHRA). For 2026, QSEHRA contribution limits rise to roughly $6,450 for self-only employees and $13,100 for employees with families (the IRS publishes the exact indexed figures annually).
The 2026 stack for small employers without a group plan now looks like this:
- The employer funds a QSEHRA or ICHRA that reimburses each employee's marketplace premium (often a Bronze plan)
- Each employee enrolls in a DPC of their choice, up to the $150/$300 limits
- Each employee opens an HSA and contributes pre-tax through payroll
- The QSEHRA/ICHRA can also reimburse the DPC fee (it qualifies as a medical expense under §213(d))
The result is real coverage—a primary care relationship plus catastrophic protection—at a fraction of group-plan cost. Note that more-than-2% S-corp owners and sole proprietors still cannot participate in the QSEHRA/ICHRA themselves; only rank-and-file W-2 employees can.
C-Corp Owners
C-corporation owners are W-2 employees of a separate legal entity, so they can participate in their own company's ICHRA, QSEHRA, group health plan, and HSA payroll arrangements with no special workaround. The DPC/Bronze/HSA stack is straightforward for this filer type.
Bookkeeping Mechanics That Trip People Up
Three accounting issues cause most of the trouble in practice.
Substantiation of the DPC fee cap. If you have more than one DPC arrangement (say, one for adult primary care and a separate pediatric DPC for your kids), you must aggregate them. Keep a written contract or membership agreement for each DPC, file it with your tax records, and confirm the total stays at or below $150 individual or $300 family per month. The IRS will look for proof that no extra fees—labs, procedures, specialist referrals charged separately—pushed you over the threshold.
HSA distributions for DPC fees. When you pay a DPC fee from your HSA, treat it like any other qualified medical expense: keep the receipt, record the transaction in your HSA accounting, and report it on Form 8889 with your annual return. Your HSA custodian generally does not police the distribution; the burden of proof is on you.
HRA reimbursements that overlap with HSA distributions. You cannot double-dip. If your employer's QSEHRA reimburses the DPC membership, you cannot then also withdraw the same fee from your HSA. Pick one bucket per dollar.
This is exactly where consistent, transparent record-keeping pays for itself. A separate ledger for medical expenses—with each DPC payment, HSA distribution, premium payment, and HRA reimbursement tagged by source and date—turns audit-proofing into a quiet weekly habit instead of a March panic.
Common Mistakes to Avoid
A few traps show up repeatedly in early DPC/HSA planning.
- Assuming any concierge medicine arrangement qualifies. Many concierge practices charge a retainer plus per-visit fees or bill insurance for individual services. Those are not DPC arrangements under OBBBA—they fail the "sole compensation is a fixed periodic fee" test.
- Forgetting the excluded-services rule. A clinic that markets itself as DPC but bundles in outpatient surgery, ongoing specialty pharmacy, or non-ambulatory lab work is disqualifying. Read the membership agreement carefully.
- Pairing a fully-insured low-deductible employer plan with an HSA "because the DPC is now allowed." OBBBA didn't change the underlying rule that you need a qualifying HDHP, Bronze plan, or Catastrophic plan as your base. A traditional PPO with a $500 deductible still disqualifies you.
- Missing the spouse-coverage trap. If your spouse has family-coverage health insurance that covers you, even if you decline it, you may still be considered "other-covered" depending on how the plan is structured. Confirm with the plan administrator before contributing.
- Treating cosmetic or wellness add-ons inside a DPC as covered services. Some DPCs offer optional aesthetic services (botox, weight-loss programs, hormone therapy) for additional fees. These extras can break the "solely primary care" requirement if not carefully separated.
The Macro Picture
OBBBA's HSA expansion is the largest in nearly a decade. By making Bronze plans HSA-eligible, OBBBA effectively triples the number of marketplace shoppers who can build a tax-advantaged medical savings account. By blessing DPC, it legitimizes a model that has been growing roughly 25% per year and now serves more than 2 million Americans. By making the telehealth safe harbor permanent, it removes the recurring annual anxiety about whether virtual visits will accidentally void someone's HSA contributions.
For small business owners and self-employed professionals, the combined effect is the most flexible health benefit toolkit in a generation. You can build a high-quality, low-friction healthcare experience—a real relationship with a primary care doctor, catastrophic protection for the unexpected, and a tax-advantaged savings vehicle—without paying for the overhead of a traditional employer group plan.
The catch is documentation. Every piece of this stack requires evidence: the DPC contract, the marketplace plan ID, the HSA Form 8889, the employer HRA notice, the W-2 box 12 code W for HSA contributions, the medical-expense receipts. Get the records right, and the savings compound; get them wrong, and you will face a 20% HSA distribution penalty plus income tax on disqualified contributions.
Keep Your Healthcare Finances Audit-Ready
Stacking DPC, a Bronze marketplace plan, an HSA, and possibly an HRA means tracking four overlapping money streams—each with its own substantiation rules. Beancount.io gives you plain-text accounting that records every contribution, distribution, premium payment, and reimbursement in a transparent, version-controlled ledger you actually own. There are no black boxes, no vendor lock-in, and your healthcare records stay readable for as long as you need them. Get started for free and see why developers, freelancers, and small business owners are switching to plain-text accounting for the financial decisions that matter.