Health Savings Accounts (HSA) and Direct Primary Care (DPC)
Are you one of the 61 million Americans with an HSA plan? Did you know there's now an even better way to leverage it for your healthcare?
Health Savings Account (HSA) plans are designed to allow people with high deductible health plans to allocate money tax free into accounts that grow tax free. The best part is that even when you take money out to spend it on a qualified health expense there is also no tax on that expense. Contributions can be made by the individual with the high deductible health plan or by an employer.
A number of employers will offer high deductible plans combined with HSA plans that they contribute to. This helps soften the blow for employees once they have to pay their deductible for medical expenses.
When I first started Core Family Practice in 2016 I was surprised to find out that DPC practices were not considered a qualified medical expense by the IRS for HSA use. Not only that, businesses that offered HSA plans were ineligible to pay for DPC for their employees and keep the HSA. It was very hard to believe that patients were technically not able to pay us to help them manage their diabetes and high blood pressure, but they could use their HSA to pay for an Apple Watch! The reason for that is because our practice works on a monthly subscription basis so the IRS considered us a secondary insurance. This is at complete odds with the Affordable Care Act which explicitly stated Direct Primary Care is not insurance. Just a case of two parts of our government not communicating effectively with each other - shocking I know!
I wasn’t the only one upset by this and I discovered an organization that was already battling for change. So I joined up and along with the Direct Primary Care Coalition - a group of physicians, healthcare associations and employers (Amazon/Boeing) - we advocated to pass a bill that clarified the tax code and allowed patients and employers to utilize an HSA with direct primary care practices.
Dr. Yerkes and I have lobbied our state representatives and Senators over the last 9 years and many others did the same in their home states. Luckily, DPC is a bipartisan issue so there were house of representatives and senators on both sides of the aisle that signed on to the bill. The Primary Care Enhancement Act was finally passed after over 10 years of advocacy. This change empowers individuals and businesses to choose how they want to spend their saved HSA dollars to improve their health. What does this mean?
For Individuals:
Pay for DPC membership with tax-exempt HSA dollars.
For Businesses:
Add DPC membership to employer-sponsored health plans.
Provide comprehensive care without employees needing to use their deductible.
Save 15-20% on healthcare spend for self-funded and level-funded businesses.
Offer a premium healthcare experience while saving employees money by making DPC the center of a plan with a high deductible health plan and HSA.
Give us a call today if you are interested in learning how including DPC in your employee health plan will work for you.
