Why the New HSA Rule Matters — and What It Means for Your Practice

By: Drew Duffy, MHA, FACHE, Founder & Managing Director, ClearPath Compliance

On July 31, 2025, a new federal tax and spending bill was enacted that permits patients with high-deductible health plans (HDHPs) to use Health Savings Accounts (HSAs) to pay for Direct Primary Care (DPC) and concierge membership fees. This is a pivotal policy change: until now, IRS interpretations effectively prohibited using HSA funds for retainer-based care models.

Key implications for your clinic:

• Lower financial barrier for patients: Membership fees can now be funded pre‑tax, making your practice more affordable and attractive to cost-conscious patients and employers.

• Greater employer adoption expected: Employers can now subsidize memberships as part of their benefit packages, leveraging HSA compatibility to reduce taxable income.

• Strategic growth window: Clinics offering membership-based care models are likely to see increased demand, as patients seek more personalized, accessible care—without giving up HSA benefits.

⚖️ State-Level Regulation: The Minnesota Example

While the federal HSA shift is promising, membership medicine remains governed at the state level, and not all states treat Direct Primary Care the same. Understanding your state’s stance is essential for legal compliance.

📍 In Minnesota:

Minnesota does not yet have a specific law that formally exempts DPC practices from insurance regulation. However, the state has historically taken a cautious but permissive stance when DPC contracts are:

• Clearly labeled as non-insurance agreements

• Paid for in flat monthly or annual fees

• Not tied to third-party insurance billing

Minnesota law defines insurance broadly, and if a membership clinic includes services that are traditionally billed per unit or appear risk-bearing (e.g., unlimited services for a flat rate), the state could classify it as engaging in insurance activity—especially if the clinic markets to employer groups.

Key Risks for Minnesota Practices:

• Marketing language matters: Avoid phrases like “unlimited care” or “covered benefits.” Instead, describe services as “access to care” or “ongoing primary care engagement.”

• No current safe harbor statute: Unlike states like Washington or Idaho, Minnesota does not have a codified legal “safe zone” for DPC. This means that legal compliance hinges on the interpretation of existing insurance laws.

• Employer arrangements require caution: Offering DPC memberships to employee groups without formal review could trigger scrutiny under the state’s insurance licensing rules.

Action Steps for Minnesota Clinics:

• Work with legal counsel to review your membership agreement annually.

• Ensure services provided match the contract exactly—no unlisted or implied care benefits.

• Keep documentation that shows your clinic does not assume risk in the same way as an insurer.

• Use patient disclosures that clearly explain this is not health insurance.

📲 Telehealth Caution: Multistate Limitations Still Apply

Even if your practice is based in Minnesota, many membership clinics offer virtual care across state lines. However, the post-pandemic relaxation of interstate telemedicine rules is fading, and licensure now matters again.

If your patients live or move out of state:

• You must be licensed in the patient’s location at the time of the virtual visit.

• You may need to adjust documentation and consent practices for each state’s standards.

• You should ensure HIPAA-compliant technology is being used, especially as the Department of Health and Human Services (HHS) rolls out updated 2025 telehealth guidance.

🔍 Summary of Key Compliance Issues for Membership Clinics in 2025

Here are the three most critical compliance areas your practice should monitor:

1. HSA Rule Changes:
Patients with high-deductible health plans can now use Health Savings Accounts (HSAs) to pay for direct primary care and concierge membership fees. This creates a significant opportunity for clinics to expand access and market their services as HSA-compatible. If your clinic hasn’t yet updated patient-facing materials or employer outreach strategies to reflect this change, now is the time.

2. Minnesota State Law on DPC:
Minnesota has not enacted a specific law exempting direct primary care practices from insurance regulation. That means your contracts must be written carefully to avoid being classified as an unlicensed insurance product. Avoid promising “unlimited” care or listing benefits that resemble insurance coverage. Instead, emphasize access to care and transparency. Work with legal counsel to ensure your agreements reflect Minnesota’s current interpretation of insurance statutes.

3. Telehealth Across State Lines:
As federal pandemic-era flexibilities expire, telehealth is once again governed by traditional state licensure rules. If you see patients virtually outside Minnesota, you must be licensed in their state at the time of service. Review where your patients live or travel and adjust your policies accordingly. Failure to do so could lead to disciplinary actions or liability.

🔍 Final Thoughts

Membership medicine is gaining momentum. With expanded HSA eligibility and rising patient demand for personalized care, clinics like yours are uniquely positioned for growth. But that growth must be legally sustainable.

At ClearPath Compliance, we monitor these changes daily—so you don’t have to. We help Minnesota clinics:

• Ensure legal alignment for membership agreements,

• Stay current with state-level regulations,

• Navigate telehealth compliance, and

• Structure employer offerings that won’t invite regulatory action.

Need help reviewing your membership contract or marketing language? Let’s make sure your practice is compliant, competitive, and ready for the next chapter in direct care.