Are Direct Primary Care Fees Tax Deductible?

Direct primary care fees are tax deductible as medical expenses under federal law. The Internal Revenue Code treats a DPC membership as payment for medical care under Section 213(d), which means you can pay for it with pre-tax dollars through a health savings account, flexible spending account, or health reimbursement arrangement, or include it in the itemized medical deductions you claim on Schedule A. Which route saves you the most tax depends on the accounts you have access to and how your other medical spending stacks up against the 7.5% of adjusted gross income floor.

Why DPC Fees Qualify as Medical Care

Section 213(d) defines medical care broadly: amounts paid for diagnosing, treating, or preventing disease, and services that affect a structure or function of the body.¹ A DPC membership fee pays for office visits, lab work, preventive screenings, and chronic disease management, so it fits the definition.

The trickier historical question was whether the IRS would classify the monthly fee as a disguised insurance premium. That classification matters in a few contexts, most importantly HSA eligibility. Congress settled the HSA question by statute (more on that below), and the underlying Section 213(d) deductibility of DPC fees has not been seriously contested. The one place the not-insurance label works against you is the self-employed health insurance deduction, which is limited to actual premiums.

Paying DPC Fees Through an HSA

An HSA is usually the most tax-efficient way to pay a DPC fee if you qualify for one. You get a deduction on the contribution going in and a tax-free withdrawal going out.

HSA eligibility requires enrollment in a high deductible health plan, and the statute bars you from being covered under any other health plan that pays benefits before your HDHP deductible. For years, a DPC membership arguably tripped that rule, because it delivers care for a flat fee regardless of the HDHP deductible. Section 223(c)(1)(E) now says a direct primary care service arrangement is not treated as a health plan for HSA purposes.² The carve-out applies when the arrangement provides medical care consisting solely of primary care services. A membership limited to routine office visits, basic labs, and preventive care should not jeopardize HSA eligibility. Memberships that bundle in specialty care or other services beyond primary care sit in less certain territory.

The 2026 HSA numbers to work with:

Contribution limits: $4,400 self-only, $8,750 family, plus a $1,000 catch-up for account holders 55 or older who are not on Medicare.³
HDHP minimum deductibles: $1,700 self-only, $3,400 family.³
HDHP out-of-pocket maximums: $8,500 self-only, $17,000 family.³

Once contributions are in the account, using them to pay your DPC fee is a qualified medical expense withdrawal.

Paying DPC Fees Through an FSA or HRA

Flexible spending accounts and health reimbursement arrangements are simpler because neither carries the HDHP-only restriction that governs HSAs. Both reimburse expenses that meet the Section 213(d) definition of medical care, and DPC fees qualify.¹ Most FSA administrators approve reimbursement when you submit an itemized statement from your DPC clinic showing service dates and the medical nature of the care.

The 2026 health care FSA salary reduction limit is $3,400 per employee. FSA funds typically follow a use-it-or-lose-it rule, though many employers offer either a $640 rollover or a 2.5-month grace period. Because DPC fees recur monthly at a predictable amount, they are well suited to FSA planning: you can size your annual election to match the total cost almost exactly.

An HRA works similarly, but the money comes from the employer and does not count as taxable income to the employee. Having other health coverage alongside an HRA is generally not a problem.

Itemizing DPC Fees on Schedule A

If you do not have an HSA, FSA, or HRA, DPC fees can still go on Schedule A as part of your itemized medical deductions. Two thresholds limit how much this actually saves you.

First is the 7.5% adjusted gross income floor: only the portion of your total medical expenses above 7.5% of AGI is deductible.⁴ At $80,000 of AGI, the first $6,000 of medical spending produces no deduction.

Second is the standard deduction. Itemizing only helps if your total itemized deductions beat it. For 2026 the standard deduction is $16,100 for single filers and $32,200 for joint filers.⁵ A DPC membership at $50 to $150 per month runs $600 to $1,800 a year. On its own, that does not push most filers past the standard deduction, but combined with prescriptions, dental work, vision care, and hospital copays, it can matter in a heavy medical year.

Travel to your DPC clinic counts too. The 2026 medical mileage rate is 20.5 cents per mile.⁶ Parking and tolls for medical trips are deductible at actual cost.

Self-Employed DPC Members

A common mistake among self-employed taxpayers is assuming DPC fees qualify for the above-the-line self-employed health insurance deduction under Section 162(l). That deduction is limited to insurance premiums. Because DPC memberships are classified as medical care rather than insurance, they do not qualify for above-the-line treatment.

Self-employed individuals therefore use the same routes as everyone else: an HSA if enrolled in an HDHP, an individual coverage HRA set up through the business, or Schedule A subject to the 7.5% floor. The HSA path is usually the most efficient of the three.

Employer-Sponsored DPC Arrangements

When an employer offers DPC as a benefit, the tax treatment turns on the structure:

Direct employer payment for employee DPC memberships is generally deductible to the business, and the employee does not count the benefit as taxable income.
Reimbursement through an HRA is deductible for the employer and tax-free for the employee.
A Section 125 cafeteria plan can let employees pay DPC fees through pre-tax payroll deductions, cutting both the employee’s taxable income and the employer’s payroll tax.

Small businesses with fewer than 50 full-time employees that do not offer a group health plan can reimburse DPC fees through a Qualified Small Employer Health Reimbursement Arrangement, with 2026 limits of approximately $6,450 for self-only and $13,100 for family coverage. Employees must maintain minimum essential coverage to receive tax-free reimbursements.⁷

DPC Membership Is Not Health Insurance

A point worth stating plainly: a DPC membership is not health insurance and does not meet the Affordable Care Act’s definition of minimum essential coverage. You still need a separate policy for hospitalizations, specialist care, emergencies, and surgery. The federal individual mandate penalty is currently $0, but going uninsured leaves you exposed to costs a DPC membership was never built to handle.

Pairing a DPC membership with an HDHP is a common setup. The Section 223(c)(1)(E) carve-out makes the combination work cleanly with an HSA: the membership covers routine care at a predictable price, the HDHP catches large bills, and the HSA holds the pre-tax dollars for both.²

Records to Keep

Whichever route you use, hold onto documentation. Save your DPC membership agreement describing the services included, monthly payment receipts or bank statements, and any annual summary the clinic provides.

HSA and FSA administrators may request an itemized statement showing the medical nature of the services before releasing funds. An invoice listing “primary care services” and the dates covered is usually enough. If you itemize on Schedule A, keep the records for at least three years after filing.

Keep DPC membership charges separate from other purchases at the same clinic. Some practices sell supplements, offer cosmetic services, or bill separately for procedures outside the membership. Only the membership fee for medical services qualifies, and combining charges on one receipt creates avoidable confusion if the IRS asks.

1
Office of the Law Revision Counsel. 26 U.S. Code 213 – Medical, Dental, Etc., Expenses
2
Office of the Law Revision Counsel. 26 U.S.C. 223 – Health Savings Accounts
3
Internal Revenue Service. Revenue Procedure 2025-19
4
Internal Revenue Service. Topic No. 502, Medical and Dental Expenses
5
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
6
Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate
7
HealthCare.gov. Health Reimbursement Arrangements (HRAs) for Small Employers