How to Pair Direct Primary Care with an ICHRA or QSEHRA
If you're a small business owner trying to offer meaningful health benefits without paying insurance premiums that feel like a second mortgage, you've probably started hearing about ICHRAs and QSEHRAs. And if you've looked into Direct Primary Care, you already know it's one of the most cost-effective ways to give employees real access to healthcare.
What most people don't realize is that these two strategies can work together — and when they do, the result is a benefits package that's more affordable for you, more valuable to your employees, and more flexible than anything traditional group insurance can offer.
This guide breaks down exactly how ICHRA and QSEHRA work, how Direct Primary Care fits into that picture, and what you need to know before setting this up for your team.
What Is an ICHRA? What Is a QSEHRA?
Both are types of Health Reimbursement Arrangements (HRAs) — employer-funded accounts that reimburse employees for qualified medical expenses, including health insurance premiums. They are not insurance plans themselves. They are a way for businesses to contribute to employee healthcare costs without the administrative and financial burden of sponsoring a group health plan.
An ICHRA (Individual Coverage HRA) allows employers of any size to reimburse employees tax-free for individual health insurance premiums and qualified medical expenses. Employees shop for their own insurance on the individual market or through an exchange, and the employer reimburses them up to a set monthly amount. There are no contribution caps — employers decide what they can afford.
A QSEHRA (Qualified Small Employer HRA) is designed specifically for businesses with fewer than 50 full-time employees that don't offer group health insurance. Contribution limits are set annually by the IRS (for 2025: up to $6,350/year for self-only coverage, $12,800/year for family coverage). Like the ICHRA, employees must have qualifying health coverage to receive reimbursements tax-free.
ICHRA vs. QSEHRA: Which One Is Right for Your Business?
ICHRA:
Any Size Business
Cannot offer group plan to same class
No cap on contribution limits - employer sets amount
Can vary amounts by employee class
Best for businesses of any size wanting flexibility
QSEHRA
Fewer than 50 employees
Cannot offer any group plan
IRS-capped annually
Same amount per employee class
Small businesses wanting simplicity
What Is Direct Primary Care — and Why Does It Pair So Well with HRAs?
Direct Primary Care (DPC) is a membership-based primary care model where patients — or employers on their behalf — pay a flat monthly fee for unlimited access to a primary care physician. No claims. No copays. No insurance billing for primary care visits. Members get same-day or next-day appointments, extended time with their doctor, direct physician communication, and care coordination when specialists are needed.
DPC is not health insurance. That distinction matters enormously here.
Because DPC is not insurance, it doesn't replace the qualifying health coverage employees need to participate in an HRA. What it does is fill the gap that insurance almost always leaves: actual, accessible primary care. When an employee has both a qualifying insurance plan (funded in part through their HRA) and a DPC membership, they have genuine coverage and genuine access — two things that rarely come together in a traditional benefits package.
How the ICHRA + DPC Combination Works in Practice
Here's the practical flow for an employer offering an ICHRA alongside a DPC membership benefit:
The employer sets up an ICHRA with a defined monthly reimbursement amount per employee (and optionally, different amounts for different employee classes — full-time vs. part-time, for example).
Employees enroll in their own individual health insurance — through healthcare.gov, a state exchange, or directly through an insurer. The HRA reimburses their premium costs up to the employer's set limit.
The employer adds a DPC membership as a separate benefit — either paying for it directly or offering it as a voluntary benefit. DPC memberships typically run $50–$100/month per adult, depending on the practice.
Employees now have two layers of coverage: insurance for hospitalizations, specialist care, and catastrophic events; and DPC for everything primary care — sick visits, preventive care, chronic disease management, labs, and direct physician access.
One important compliance note: DPC membership fees are generally not reimbursable through an ICHRA or QSEHRA as a standalone expense, because DPC is not a qualifying insurance product. However, if an employee submits DPC fees as a qualified medical expense under certain plan structures, this may be permissible — and this is an area where working with a qualified benefits administrator is essential. The strategic value of the stack remains strong regardless of how DPC is funded.
According to the Health Rosetta, employers who pair DPC with high-deductible insurance plans see primary care costs drop by up to 20% while employee satisfaction with healthcare access increases significantly.
How the QSEHRA + DPC Combination Works
For businesses with fewer than 50 employees and no existing group plan, a QSEHRA is often the cleaner starting point.
The setup is similar: the employer funds a QSEHRA up to the IRS annual cap, employees purchase individual insurance and submit premiums for reimbursement, and the DPC membership runs as a parallel benefit — either employer-paid or employee-elected.
For very small businesses (5–15 employees), this combination can represent a complete benefits overhaul at a fraction of what group insurance would cost. Employees get reimbursement support for insurance premiums and a DPC membership that gives them a doctor they can actually reach. That's a compelling offer for recruitment and retention in a competitive hiring market.
Real Benefits for Employers and Employees
For employers:
Predictable, capped monthly costs — no surprise premium increases mid-year
Reduced ER utilization when employees have accessible primary care (studies show DPC members use the ER up to 40% less than non-DPC patients)
A tangible, differentiated benefit that supports recruitment and reduces turnover
Simple administration compared to managing a group health plan
For employees:
Real access to a primary care physician — same-day appointments, no referral runaround
A doctor who knows them, their history, and their family
Lower out-of-pocket costs for everyday healthcare needs
The confidence that comes with having a healthcare home base
At New South Family Medicine in Fort Mill, SC, our DPC members — individuals, families, and employer groups across the Charlotte area — consistently tell us that what changed their experience wasn't just the access. It was finally having a doctor who had time to actually listen.
What to Know Before Setting This Up
A few practical guardrails before you move forward:
Work with a qualified HRA administrator or benefits consultant. ICHRA and QSEHRA compliance involves specific IRS rules, employee notice requirements, and documentation. This is not a DIY setup — a qualified administrator (like a PEO, benefits broker, or HRA-specific platform such as Take Command or PeopleKeep) makes this manageable.
Clarify how DPC will be funded. Direct employer payment of DPC membership fees is a clean, common approach. Whether those fees can flow through an HRA depends on plan structure and IRS guidance at the time — your administrator can advise.
Communicate the full picture to employees. Employees who understand they have both an HRA for insurance and a DPC membership for primary care access are far more likely to use — and value — the benefit. Consider holding a short education session when you roll this out.
This combination works best as a system. Each piece plays a specific role, and when employees understand how they fit together, the benefits become tangible rather than theoretical.
FAQ
Q: Can I use an ICHRA or QSEHRA to pay for Direct Primary Care? DPC membership fees are generally not directly reimbursable through an ICHRA or QSEHRA as a standalone expense, because DPC is not classified as qualifying health insurance. However, employers can pay for DPC memberships directly as a separate benefit alongside the HRA. A benefits administrator can help you structure this correctly.
Q: Does an employee need health insurance to participate in an ICHRA? Yes. To receive ICHRA reimbursements tax-free, employees must be enrolled in individual health insurance coverage (ACA-compliant, Medicare, or certain other qualifying plans). This is a non-negotiable requirement under IRS rules.
Q: Can a small business in the Fort Mill or Charlotte area use a QSEHRA? Yes. Any small business with fewer than 50 full-time equivalent employees that doesn't offer a group health plan is eligible to offer a QSEHRA, regardless of location. New South Family Medicine works with small businesses across Fort Mill, Rock Hill, and the greater Charlotte area to structure DPC as part of their overall employee health strategy.
Q: How much does it cost to offer Direct Primary Care to employees? DPC memberships typically range from $50–$100 per adult per month, depending on the practice and plan tier. For an employer group, volume pricing is often available. At New South, we work with businesses to find a structure that fits their team and budget — contact us for a group pricing conversation.
Q: What's the difference between Direct Primary Care and concierge medicine? Both models offer direct physician access, but they differ significantly in cost and scope. Concierge practices typically charge $200–$500+/month and often still bill insurance on top of that. DPC practices charge a flat, transparent monthly fee — usually $50–$100/month — and do not bill insurance for primary care. DPC is designed to be accessible, not exclusive.
Q: Is this benefits strategy right for every small business? It works especially well for businesses with 5–50 employees that can't afford or don't want traditional group insurance, want to offer something meaningful for recruitment and retention, and have employees who value healthcare access. It's less ideal for businesses that already have a well-utilized group plan with low premiums — though DPC can still add value as a complementary layer.
The combination of an ICHRA or QSEHRA with a Direct Primary Care membership isn't a workaround — it's a modern benefits strategy built for how small businesses actually operate today. You get cost control and flexibility on the insurance side. Your employees get a real doctor, real access, and real care on the primary care side.
If you're a small business owner in the Fort Mill, Rock Hill, or Charlotte area and you want to explore whether a DPC + HRA benefits strategy is right for your team, we're happy to walk you through it — no pressure, no broker fees. Just a straightforward conversation with people who know this model from the inside.
