Paying for direct primary care through employer HRAs slowed cost growth over five years, data show

Employers that covered workers’ direct primary care (DPC) memberships through a health reimbursement arrangement (HRA) held annual health care cost growth to 0.9% over five years. The expected trend was 6.2%. Emergency department visits fell 31% and inpatient hospital admissions fell 71%.

The figures come from a five-year analysis of employer clients of SALTA Direct Primary Care, a membership practice group in southeast Michigan. SALTA and benefits administrator Ameriflex released the results Oct. 14 in a news release. Participating employers saved $13.84 million over the period, a 2.2-times return on investment, the companies said.

Average family premiums for employer coverage rose 6% in 2025 to $26,993, according to KFF’s annual survey of employers.

How does HRA funding for direct primary care work?

An employer funds an HRA, and the HRA pays the practice’s fixed monthly membership fee with pretax dollars. In proposed regulations from 2020, the Internal Revenue Service (IRS) said an employer HRA generally may reimburse employees for DPC payments because they count as medical care under the tax code.

The membership sits alongside the employer’s health plan rather than replacing it. Specialist visits, hospitalizations and surgery still run through the existing plan, according to SALTA’s guidance for employers.

In SALTA’s case, a software platform called Accresa syncs eligibility, splits payments among the parties and reconciles accounts, sending the employer’s human resources team a single invoice. Accresa describes Ameriflex as its sister company in a blog post on the results. The release does not mention the relationship.

“SALTA would not be growing as rapidly with employer clients today without our partnerships with Ameriflex and Accresa,” John Blanchard, M.D., a family physician and SALTA’s founder and CEO, said in the release.

What did employers see?

Patients at SALTA’s clinics in Auburn Hills, Clarkston, Shelby Township and Troy returned to the emergency department at a rate of 23%. That compares with 42% for patients in traditional primary care groups, the companies said. After program costs, they put net savings at $2.90 million a year per 1,000 enrolled people, or about $2,900 per person.

A case study on Accresa’s website adds that members who used the clinics had a 25% lower rate of hospital stays than members who didn’t. That held even though clinic users carried a 40% higher burden of long-term illness.

How solid are the savings numbers?

Neither the release nor the case study says who conducted the analysis, how many employers or employees took part, which years it covered or where the 6.2% expected trend came from. Without an enrollment count, the per-1,000 savings figure can’t be checked against the $13.84 million total. The release also does not say what window it used to count return visits to the emergency department.

Employees who opt into DPC through an employer tend to have lower expected health costs than co-workers who stay in a traditional plan, Milliman actuaries found in a 2020 study commissioned by the Society of Actuaries. The firm cautioned that studies that don’t adjust for that difference can credit DPC with savings that actually come from the patients themselves.

Milliman compared about 900 DPC enrollees with about 1,100 patients in the same employer’s preferred provider organization plan over two years. After adjusting for health status, the DPC group used fewer downstream services, mainly because they used emergency departments and other facility services less. Even so, the employer’s net costs for DPC enrollees came out an estimated 1.3% higher, within a range of a 5.2% reduction to a 7.8% increase, because the employer paid the membership fees and waived the medical deductible for everyone in the DPC option.

SALTA tells prospective employer clients that it can analyze cost trends and estimate return on investment only for employers that share claims data with the practice.

How do the new health savings account rules affect employer contracts?

The One Big Beautiful Bill Act, signed July 4, 2025, changed how DPC interacts with health savings accounts (HSAs). Starting in 2026, it stopped treating qualifying DPC arrangements as coverage that disqualifies someone from HSA contributions.

IRS guidance issued in December sets the terms. A qualifying arrangement must provide only primary care from primary care practitioners for a fixed fee of no more than $150 a month for one person or $300 for more than one. Those caps adjust for inflation after 2026. The average DPC membership costs $98.46 a month, according to a 2024 Direct Primary Care Alliance survey of 465 physicians.

Several of the notice’s answers bear directly on how a practice structures an employer offering:

• No separate billing for included services. The fixed fee must be the only payment for those services, though a practice can bill separately for care outside the arrangement.
• Contract terms decide. An arrangement that includes services beyond primary care doesn’t qualify, even if a member never uses them.
• Billing periods can vary. Fees can be billed for up to a year at a time, as long as they stay within the monthly cap on an annualized basis.
• Fees above the caps. These can still be paid from an HSA, but the member can’t contribute to one while enrolled.

The notice also limits how employers can combine DPC with a high-deductible plan. The plan can’t pay DPC fees before the deductible is met, and DPC fees an employer pays, including through salary reduction, can’t be reimbursed from the employee’s HSA. An HRA generally must reimburse only premiums to avoid disqualifying an employee from contributing to an HSA, according to the notice. The SALTA release does not say whether employees in the program were enrolled in HSA-eligible plans.

How are DPC physicians approaching employers?

Chambers of commerce were the most common starting point cited during a Medical Economics and Physicians Practice panel discussion earlier this year.

Kelsey Smith, M.D., president of the Direct Primary Care Alliance and a DPC physician in Stillwater, Oklahoma, markets her practice directly to businesses with fewer than 50 employees. The Patient Protection and Affordable Care Act does not require employers that small to offer coverage.

“Small employers really want to take care of their people, and they’re really hungry for an affordable way to do that,” Smith said.

Richard Berry, M.D., founder of Maple Health Direct Primary Care in Mentor, Ohio, said self-funded employers come to DPC to avoid costs directly. His employer clients range from two employees to 175. HSA use is already common in his practice because high-deductible plans are widespread among his small-business clients.

“We’re seeing, I would say, at least 25% minimum of our patients actually utilize HSA,” Berry said.

Smith’s patients use HSAs far less. “I think it will dramatically increase in the next few years, if I had to speculate, just because it has given employers a different way to think about structuring their plans,” she said.

Josh Umbehr, M.D., co-founder of Atlas MD in Wichita, Kansas, told Medical Economics in May that employers “are coming to us too and saying, ‘How do we solve this?’”

“They want better insurance, lower cost and still good access to primary care, urgent care, specialty care and emergency care,” Umbehr said in the interview.

What’s next

Treasury and the IRS took comments on the December notice through March 6. Congress directed Treasury to define “primary care services” after consulting the Department of Health and Human Services, and the notice did not do so, according to Groom Law Group, a benefits law firm. The $150 and $300 caps are set to rise with inflation starting in 2027.