Patients who are weighing a concierge membership often ask whether they can pay the fee from a health savings account (HSA) or flexible spending account (FSA). It is a reasonable question, because the fee can be a meaningful expense and pre-tax dollars stretch further.
The honest answer is that it depends on how the practice is set up, and the rules changed recently. I am a physician, not a tax adviser, so treat this as a map of the questions to ask rather than tax advice. Your plan administrator and a tax professional have the final word.
What Changed in 2026
A federal law passed in 2025, often called the One Big Beautiful Bill Act, created a new category called a direct primary care service arrangement. In December 2025 the IRS explained the details in Notice 2026-05. Starting in 2026, being enrolled in a qualifying direct primary care arrangement no longer disqualifies you from contributing to an HSA, and you can use HSA money to pay the membership fee.
Who the new rule is for
The change was written with direct primary care in mind: practices that charge a flat membership fee for primary care and do not bill insurance for it. For people with a high-deductible health plan, it removes a problem that used to force a choice between the membership and the tax-advantaged account.
The conditions an arrangement must meet
The notice sets strict conditions for an arrangement to qualify:
- It must provide only primary care services from primary care practitioners.
- Its sole compensation must be a fixed periodic fee.
- The fee must stay under a monthly cap set by law, which is adjusted for inflation over time.
- It cannot include procedures that require general anesthesia, prescription drugs other than vaccines, or lab tests beyond those typically done in a primary care office.
Why Most Concierge Practices Are Different
The key phrase is "sole compensation." A direct primary care practice typically does not bill insurance at all, so the membership fee is its only payment. Most concierge practices work differently: they charge a membership fee and also bill your insurance or Medicare for covered visits and tests.
Because of that, a traditional concierge membership that also bills insurance most likely does not fit the new direct primary care definition. The notice does allow a practice to offer separately billed services outside the arrangement, so some practices may structure a qualifying membership, but you should not assume yours does. Ask the practice directly whether its membership meets the IRS definition in Notice 2026-05.
Using an HSA If Your Membership Does Not Qualify
Even outside the new rule, HSA money can be spent on "qualified medical expenses," which IRS Publication 502 describes as payments for the diagnosis, cure, mitigation, treatment, or prevention of disease. The IRS has not issued clear guidance treating concierge retainer fees as a qualified expense, and a fee that pays mainly for access and convenience may not qualify. If you spend HSA money on an expense that does not qualify, it becomes taxable income and may carry an additional penalty.
A second question is whether a membership could affect your ability to keep contributing to an HSA at all. Under IRS Publication 969, you can generally only contribute while you are covered by a high-deductible health plan and no other disqualifying coverage. Before the 2026 change, that was the main reason direct primary care memberships caused HSA problems.
What About an FSA?
A health FSA reimburses qualified medical expenses too, but Notice 2026-05 does not address FSAs. Many FSA administrators will not reimburse a general membership fee without documentation tying it to specific medical services. Ask your administrator before you pay, and ask the practice whether it can provide an itemized description of what the fee covers.
Medicare Changes the Picture
For many of our patients, Medicare settles the HSA question. Once you are enrolled in any part of Medicare, you can no longer contribute to an HSA, although you can still spend money already in the account on qualified medical expenses. Medicare also does not pay concierge membership fees; it continues to cover medically necessary services from a participating doctor. Our article on whether Medicare covers concierge medicine explains how the pieces fit.
Questions to Ask Before You Pay
- Does the membership meet the IRS definition of a direct primary care service arrangement, and can the practice put that in writing?
- Does the practice bill my insurance or Medicare for visits in addition to the fee?
- Can the practice provide an itemized statement of what the fee covers?
- Will my HSA custodian or FSA administrator accept that documentation?
- If I am on Medicare, am I still allowed to contribute to my HSA? (Usually not.)
The Bottom Line
The new law is good news for direct primary care, but it is narrower than many headlines suggest. For a concierge membership that also bills insurance, assume the fee is an out-of-pocket expense unless your tax adviser and plan administrator confirm otherwise. It is also worth keeping the value question separate from the tax question: our guide to what concierge membership fees pay for can help you decide whether a membership is right for you in the first place.
The same diligence applies to chronic care. If you manage diabetes or high blood pressure, the regular visits and labs you need are usually billed to insurance whether or not you have a membership, which matters when you budget.
Considering a concierge membership in St. Petersburg? Call Zimmer Medical Group at (727) 820-7800 and ask about our concierge medicine program. Membership details are discussed by phone.
