Let Medical Freedom Ring!
This Independence Day carries even deeper meaning. It is not just a celebration of liberty for our nation. It is a declaration of independence in healthcare; restoring freedom to doctors and patients!
At 5:00 PM (EST) on July 4th 2025, President Donald J. Trump will sign the historic 119th Congress H.R.1, also known as the One Big Beautiful Bill Act, that includes one big beautiful section titled, “Treatment of Direct Primary Care Service Agreements”.
The signature will resolve a decade-long ambiguity surrounding Direct Primary Care and health savings accounts. Direct Primary Care will officially be recognized by the United States Federal Government as an advanced primary care payment and delivery model. Direct Primary Care will be clearly defined as not being insurance or a health plan, making it eligible for payment with tax-deductible health savings accounts! The law expands eligibility to make tax-deductible health savings accounts contributions to include individuals who have a Direct Primary Care service arrangement with a fixed period fee that does not exceed $150 a month (or $300 a month if the arrangement covers more than one individual). Spending on a Direct Primary Care agreement will also count toward the deductible of a high-deductible health plan.
In addition, the One Big Beautiful Bill Act:
1. Expands eligibility to make tax-deductible health savings account contributions to allow certain individuals who are 65 or older and are enrolled in Medicare Part A to contribute to a health savings account.
2. Expands eligibility to make tax-deductible health savings account contributions to include individuals who have a bronze-level or catastrophic health insurance plan through a health insurance exchange.
3. Provides statutory authority for individuals to contribute to a health savings account while also accessing some types of health care at an employer-sponsored clinic on the employer’s premises or at a health care facility operated by an employer for the benefit of employees.
4. Allows taxpayers to use up to $500 a year ($1,000 per year for joint filers) in health savings account funds to pay for a membership at a fitness facility or for participation or instruction in physical exercise or physical activity. (Some limitations apply.)
5. Allows married individuals who are 55 or older to make catch-up contributions to the same health savings accounts. (Some limitations apply.)
6. Allows individuals to roll over amounts in a flexible spending arrangement or health retirement account into a health savings account. (Some limitations apply.)
7. Excludes from taxable income any distributions from a health savings account used to pay qualified medical expenses incurred before the health savings account is established if the health savings account is established within 60 days from the first day of coverage under a high-deductible health plan.
8. Allows an individual to contribute to a health savings account, even if covered by a spouse’s flexible spending account. (Some limitations apply.)
9. Increases health savings account contribution limits by $4,300 for individuals with self-only coverage and by $8,550 for individual with family coverage, adjusted annually for inflation. The increase in health savings account contributions begins to phase out for individuals with an adjusted gross income exceeding $75,000 (or $150,000 for joint filers who have family coverage). (Some limitations apply.)
***Please be sure to check with your accountant, tax advisor and health insurance representative regarding the details of your specific individual situation.***
This legislative victory is expected to significantly expand Direct Primary Care making it a more attractive and accessible primary care model where patient’s come first, costs are transparent, and care is built on a long-term doctor-patient relationship!
