Health Savings Accounts
May Health Savings Account funds be used to pay the DPC membership fee?
Unfortunately the short answer is No. The IRS currently views the DPC monthly periodic fee as a "health plan," just like a standard monthly health insurance premium is viewed as a "health plan." According to the IRS the DPC monthly membership fee is thus a second "health plan" and the amount is not a qualified HSA expense.
Theoretically if you had a patient in possession of an HSA that did NOT have traditional insurance or some other "health plan" (per the IRS definition), then his DPC membership fee would be eligible for HSA spending (since it is not a second health plan and instead would be the only health plan). While this is an untested question, it might mean that uninsured patients or patients using health sharing ministries in lieu of traditional insurance would be able to use HSA funds for DPC periodic fees.
How do we solve this problem? From the mouths of the folks at treasury "pass a bill." Jay Keese, myself, and others at the Direct Primary Care Coalition are attempting to make that happen as we speak. Feel free to join the group if you like. The Coalition was able to get Senators Cantwell & Murray along with Congressman McDermott to author a letter to IRS Commissioner Koskinen. He provided a response to their letter, and due to his interpretation we are seeking a legislative clarification (which could otherwise only be achieved with a judicial challenge).
What points should you keep in mind when discussing HSAs with patients and employers looking to minimize their tax burdens?
1) Remind patients that any disputes (audit disagreements) would be between the patient and the IRS
2) Itemize your bill as much as possible (add-on charges such as labs, medications, procedures, etc. are HSA qualifying expenses)
3) Consider whether your patient already has an IRS defined "health plan"
4) Consider the idea of using an employer Flexible Spending Account instead
Helpful additional resources:
IRS Publication 502 Medical and Dental Expenses
Flexible Spending Accounts (aka Section 125 Cafeteria Plans) (one group's opinion of eligible expenses, note "boutique")
(DPC should qualify - bill in arrears, focus on preventive nature, consider itemized statement of preventive services)
Healthcare Qualifying Expenses Table
What about Health Reimbursement Accounts and Flexible Spending Arrangements?
These questions are commonly faced when approaching employers that want to pair DPC with a variety of other options. These issues grow complicated quickly. Consider reading IRS Notice 2016-17 and IRS Notice 2013-54 when attempting to answer these questions.