What Is Direct Primary Care, and Is It Worth Adding to Your Benefits Package?

Most employers spend a significant amount of energy managing the cost of health insurance, shopping plans, adjusting deductibles, switching carriers: but relatively little time thinking about how their employees actually access primary care. Direct Primary Care, or DPC, is an emerging model that addresses exactly that, and a significant law change effective January 1, 2026 just made it considerably more viable as part of an employer benefits package.

If you haven't heard of Direct Primary Care before, you're not alone. It's been growing steadily among individual consumers and small businesses for about a decade, but it remained on the edges of mainstream benefits design partly because of a technical conflict with Health Savings Account rules. That conflict has now been resolved: and that's worth understanding.

What Direct Primary Care Actually Is

Direct Primary Care is a membership-based primary care model. Instead of billing insurance for every visit, employees pay a flat monthly membership fee, typically $50 to $150 per month for adults: directly to a primary care physician. In exchange, they get unlimited access to that physician: same-day or next-day appointments, extended visit times, direct texting and phone access to their doctor, and no copays or surprise bills for covered services.

The DPC physician carries a much smaller patient panel than a typical insurance-based practice, often 400 to 600 patients rather than the 2,000 to 3,000 typical in traditional fee-for-service medicine. That smaller panel is what makes the model work. The doctor actually has time for patients. Calls get returned. Appointments aren't three weeks out.

For employees with a DPC membership, the experience of primary care changes dramatically. A sick employee who might otherwise spend $150 at urgent care, or skip care entirely because of cost and hassle, can instead text their doctor and be seen the same day. Someone managing a chronic condition like diabetes or high blood pressure gets consistent, attentive oversight rather than a rushed 10-minute quarterly appointment.

The HSA Problem That's Now Been Fixed

Until January 1, 2026, Direct Primary Care existed in an awkward regulatory limbo when it came to Health Savings Accounts. HSA eligibility requires that an employee be enrolled in a qualifying High Deductible Health Plan and not have access to "other coverage" that pays for medical expenses before the deductible is met. The IRS had taken the position that a DPC membership, because it provided healthcare services in exchange for a monthly fee, might constitute disqualifying "other coverage" and jeopardize the employee's HSA eligibility.

This created a real problem for employers who wanted to offer DPC alongside an HDHP/HSA plan design. The combination was appealing conceptually but legally murky. Cautious benefit advisors told clients to stay away.

The One Big Beautiful Bill Act, signed into law in July 2025 and effective January 1, 2026, resolved this definitively. DPC memberships are now explicitly recognized as qualified medical expenses under HSA rules, and participating in a DPC arrangement no longer disqualifies an employee from contributing to an HSA. The law does establish monthly limits on what DPC fees can be paid through an HSA, up to $150 per month for individuals, $300 per month for families: and those limits are indexed for inflation going forward.

The practical result: an employer can now confidently pair an HDHP with employer-sponsored DPC memberships and HSA contributions without worrying about disqualifying employees from tax-advantaged savings. That combination is becoming increasingly popular among benefits advisors and employers who want to offer high-value care access while keeping insurance costs manageable.

Why This Model Is Interesting for Smaller Employers

Large employers have long had the ability to self-fund health plans, set up on-site clinics, and negotiate directly with health systems. Employers with 25 to 500 employees typically don't have those options. They take what the carrier market offers, accept the annual renewal increase, and hope employees use the plan efficiently.

Direct Primary Care is one of the few benefit enhancements that genuinely levels the playing field for smaller employers. For a monthly cost roughly equivalent to one urgent care visit, or one trip to the emergency room, employees get unlimited access to a doctor who knows them and their health history. That access changes behavior in ways that can reduce downstream costs.

Employees with DPC access are more likely to seek care early for problems that, left unaddressed, become more expensive. They're less likely to use urgent care and emergency rooms for situations that a primary care physician can handle. For employees managing chronic conditions, consistent primary care oversight produces better health outcomes and fewer costly complications. For employers operating partially or fully self-insured plans, those cost avoidances compound meaningfully over time.

For fully-insured smaller employers, the direct ROI calculation is harder to prove, but the recruitment and retention value is tangible. A DPC membership is a differentiated benefit that most competitors don't offer, and it's one that employees with families: the people most likely to need ongoing primary care, will genuinely notice and value.

What DPC Is Not

It's important to be clear about what Direct Primary Care doesn't cover. DPC handles primary care, the ongoing relationship with a personal physician, management of chronic conditions, acute sick visits, preventive care, minor procedures. It does not replace comprehensive health insurance.

If an employee is hospitalized, needs surgery, sees a specialist, or fills a prescription, they still need insurance coverage. DPC is designed to complement a health plan, not replace it. The typical model pairs DPC with a high-deductible health plan: employees use the DPC membership for the vast majority of their healthcare interactions, and the HDHP kicks in for the significant expenses DPC doesn't cover.

This is worth explaining clearly to employees. Confusion about what DPC covers is one of the most common implementation stumbling blocks. If employees think the DPC membership means they don't need their health plan, or if they're unclear about when to use the DPC physician versus when to go elsewhere, the model doesn't work as intended.

What Implementation Looks Like

For employers seriously considering DPC, here's how the process typically works.

First, identify a DPC practice in your area, or a DPC network, if you have employees in multiple locations. Direct Primary Care is most concentrated in mid-sized metros and suburban markets; availability varies. A good benefits broker with DPC experience can help you identify local options and evaluate the practices in terms of panel size, physician tenure, and services offered.

Second, decide on the funding model. Employers typically pay the DPC membership fee as an employer-sponsored benefit, making it a pre-tax benefit for employees under current IRS rules. Some employers split the cost, with the employer covering a portion and employees contributing the rest. The membership fee structure should be built into your benefits budget modeling before you commit.

Third, pair the DPC benefit with an HDHP and HSA structure if you're not already using one. The combination is where the model delivers maximum value, and the 2026 law change makes this pairing explicitly clean from a tax standpoint. Work with your benefits broker and your Section 125 plan consultant to structure the documents correctly.

Finally, invest in education. Employee awareness and understanding of how to use the DPC membership will largely determine whether it delivers the value you're paying for. Build a communication plan around enrollment, explain clearly what the DPC physician covers, how to contact them, and how the membership interacts with the broader health plan.

Is It Right for Your Company?

Direct Primary Care isn't a perfect fit for every employer. It works best in markets with strong DPC availability, with employee populations who would actively use primary care if access were easier, and for companies willing to put in the enrollment communication work to make sure employees understand what they have.

It also requires willingness to think about benefits design differently. If your current approach is to pick the least expensive fully-insured plan and leave employees to navigate the healthcare system on their own, DPC is a more hands-on commitment. But if you're looking for a differentiated, employee-valued benefit that addresses a genuine gap in how most Americans actually experience healthcare, the inability to reach their doctor easily when something comes up, DPC is worth a serious look.

The 2026 law change resolved the main regulatory obstacle that had kept DPC in the margins of employer benefits. Ask your broker whether DPC is available in your market and what the economics look like for your employee population. It's one of the more interesting conversations in benefits design right now., -

Benefits Collective helps employers with 25 to 500 employees design smarter, more competitive benefits packages. If you're interested in exploring whether Direct Primary Care makes sense for your workforce, schedule a consultation to talk through the options.