The "Primary Care Enhancement Act of 2025" clarifies the tax treatment of direct primary care (DPC) arrangements, excluding them from being considered a health plan for HSA purposes under certain conditions, and allowing DPC fees to be considered medical expenses.
Lloyd Smucker
Representative
PA-11
The "Primary Care Enhancement Act of 2025" modifies the treatment of direct primary care (DPC) arrangements for health savings account (HSA) purposes. It excludes DPC arrangements from being considered a health plan under certain conditions, such as DPC arrangements solely covering primary care services from primary care practitioners for a fixed periodic fee, with limits on monthly fees, and it treats DPC fees as medical expenses. This act also mandates the reporting of DPC fees on W-2 forms and adjusts fee limits for inflation.
Primary Care Enhancement Act of 2025: DPC Bills Won't Mess with Your HSA, But There Are Limits
The "Primary Care Enhancement Act of 2025" aims to tweak how direct primary care (DPC) works with Health Savings Accounts (HSAs). Basically, it's trying to make it easier for folks with HSAs to use DPC services without getting penalized tax-wise.
Straight-Up Savings?
The core idea is this: If you pay a monthly fee for direct primary care (think a flat rate for basic doctor visits and checkups), that fee won't automatically disqualify you from using your HSA. Right now, it's a gray area. This bill clarifies that, as long as the DPC arrangement only covers primary care and the monthly fee is $150 or less per person ($300 for families, as defined in Sec. 2). That fee also gets treated as a medical expense, which could save you some money come tax time (Sec. 2).
The Fine Print: What's Not Included
Here's where it gets specific. The bill says "primary care" doesn't include things like procedures needing general anesthesia, prescription drugs, or specialized lab tests (Sec. 2). So, if your DPC offers those, you might still run into HSA complications. Also, that $150 monthly cap? It'll adjust for inflation starting in 2026 (Sec. 2), but it might still be tight for folks in high-cost areas.
Real-World Rollout
Imagine you're a freelancer with an HSA. This bill could mean you can use a DPC for routine care and still stash tax-free money in your HSA for other medical needs. But if your DPC includes, say, a specialized lab test, you'll need to figure out how that fits into your HSA. Or, if you are a small business owner, and you offer DPC to your staff, you'll now have to report those DPC fees on their W-2s (Sec. 2), which is a bit more paperwork. These changes kick in after December 31, 2025, for the tax years following (Sec. 2).
The Bottom Line
This bill tries to bridge the gap between DPC and HSAs, which could be good for people looking for more primary care options. But the limits on what counts as "primary care" and the fee cap could be sticking points. It adds a bit of clarity, but also some new rules to navigate.