Annual or Monthly Billing for DPC Memberships? A 2027 Guide

Should a DPC Practice Bill Memberships Monthly or Annually?

For a direct primary care practice, a monthly default with annual prepayment as an option for members who want it is the simplest setup to run. Monthly billing keeps the price easy to say yes to, keeps refunds simple and matches the monthly fee language in state DPC laws such as Washington's and Florida's. Annual billing brings a year of cash in at once and cuts the number of charges, but that money is not earned until you deliver the care, so it comes with refund terms, state rules and HSA limits you need to plan for.

Neither choice is wrong. The right mix depends on your state's DPC statute, how many of your members pay with an HSA, how much cash you need in the first year and how much refund work your billing setup can handle. This guide walks through each of those in turn. It is general information, not legal or tax advice, so have a healthcare attorney and a CPA review your agreement and price sheet before you publish them.

Annual vs Monthly DPC Billing at a Glance

How Annual Billing Changes a DPC Practice's Cash Flow

The appeal of annual billing is easy to see. A member who pays for the year hands you twelve months of revenue on day one, which can help a young practice cover rent, payroll and equipment while the panel grows. If you are still building your startup budget, our guide to financing a DPC startup covers the other places early cash comes from.

The catch is that prepaid money is not really yours yet. Until you deliver each month of care, that cash is a promise, and if the member moves, cancels or you close the practice, part of it goes back. Accountants treat it as unearned revenue for exactly this reason, and it is wise to manage it the same way, keeping the unearned part in a separate account or at least tracking it on its own line so you never spend money you might owe back.

That matters most in two moments. The first is a slow month, when it is tempting to use prepaid cash to cover a gap. The second is any change that might trigger several cancellations at once, like a move to a new location, a price change or a doctor leaving. A practice that has already spent its annual prepayments can find itself short exactly when refunds are due.

Monthly billing avoids that problem by matching cash to care. Revenue arrives a month at a time, so a cancellation means one fewer payment rather than a refund. It is also why monthly is easier to model when you work out your break-even panel size, since every member contributes the same amount each month.

How Much of a Discount Should You Give for Paying a Year Up Front?

There is no published industry standard for DPC annual discounts, and we could not find a sourced figure for what practices typically offer. Hint's own help article on configuring membership rates and billing options uses a 10% annual discount as its example, which is a reasonable starting point to test, not a benchmark.

It helps to know what the discount actually buys you. Card processors charge a percentage of each payment plus a small fixed fee, and only the fixed part shrinks when you bill once a year. Stripe's pricing page, checked on November 4, 2026, lists 2.9% + $0.30 for domestic cards and 0.8% with a $5 cap for ACH Direct Debit.

Take a hypothetical membership of $100 a month.

Twelve card payments at that rate cost $38.40 in fees, and one annual card payment for the year costs $35.10, a saving of $3.30 per member per year.

By ACH the gap is bigger, because twelve monthly debits cost $9.60 while one annual debit hits the $5 cap.

So a discount mostly pays for two other things, which are the cash up front and the member's commitment for the year. Those are worth something, and for a practice with a waiting list or a strong word-of-mouth pull they may be worth less. Price the discount against your own numbers, using our guides to setting DPC membership prices and DPC payment processing fees for the inputs.

A few practical habits make annual pricing easier to live with:

• Show the monthly equivalent next to the annual price, so members compare like with like.
• Apply the same discount to every tier, including the family and child tiers, so the price sheet stays simple.
• Decide in advance what happens to the discount if a member cancels early, and write that into the agreement.
• Keep employer contracts separate, since they usually follow their own invoicing terms (see selling DPC to employers).

What Refund and Cancellation Terms Should an Annual DPC Membership Have?

Every annual plan needs a written answer to one question, which is what happens to the unearned months if the membership ends early. The simplest fair answer is a prorated refund of the months not yet delivered, paid within a set number of days after written notice. Your agreement can also say whether the annual discount is recalculated on an early exit, for example by charging the months used at the monthly rate before refunding the rest.

Whatever you choose, spell it out in the agreement and on the signup page in plain words. A good cancellation section covers these points:

1. How either side gives notice, and how many days' notice is required.
2. How the unearned amount is calculated, and whether the discount is adjusted.
3. How fast the refund goes out, and to which payment method.
4. What happens if the practice closes or a doctor leaves.
5. Whether there is a minimum enrollment period, and what it means for refunds.

Clear terms also protect you from card disputes. Stripe's guide to how disputes work says card networks typically allow cardholders to dispute within 120 days of a payment, and that when a customer pays for a future service, the dispute window generally starts on the service date rather than the payment date. A year of prepaid care is a future service, so a member who feels a refund was handled unfairly may still be able to dispute months after the charge. Fast, predictable refunds are the best defense.

Do State DPC Laws Require Refunds of Prepaid Fees?

Some do, and a few go further than you might expect. Some statutes, such as Washington's and Florida's, are written around a monthly fee, so prepayment for longer periods can trigger extra rules. Here are three examples we read directly on November 3, 2026.

Washington's RCW 48.150.030 says a direct practice must charge its fee on a monthly basis and must either bill at the end of each month or, if the patient pays in advance, promptly refund all unearned fees after written notice of termination, prorated to the date the notice arrives. If a patient chooses to pay more than one monthly fee in advance, the money must be held in a trust account and paid to the practice as it is earned at the end of each month. The same section requires at least sixty days' notice of any fee change.

Nebraska's statute, section 71-9504, requires every direct agreement to say that the patient may end it at will with written notice, and that after either party gives notice of termination the provider must refund all unearned charges within thirty days.

Florida's direct health care agreement statute, section 624.27, requires each agreement to let either party end it with at least 30 days' advance written notice, to specify the monthly fee and any automatic renewal terms, and to offer a refund of monthly fees paid in advance if the provider stops offering care for any reason.

Other states have their own wording, and some have no DPC statute at all. Look up your state in our DPC laws by state guide and read the statute itself before you offer annual plans. In states without a DPC law, the question of whether a prepaid membership looks like insurance falls to the state insurance department, which is one reason Hint's help article notes that some practices bill in arrears (at the end of the month) for added protection. Hint supports only monthly periods for arrears billing, so annual options are not available on those plans.

If you sign members before opening, the same rules apply to presale money, as we cover in our guide to founding member presales. The business entity that holds the trust account or reserve matters too, so it is worth settling that early with the help of our PLLC vs LLC guide.

How HSA Payments Work With Annual DPC Billing in 2027

Since January 1, 2026, a qualifying direct primary care membership no longer blocks HSA contributions, as long as its fees stay under a monthly cap. Rev. Proc. 2026-24 keeps that cap for 2027 at the same amounts as 2026.

The 2027 cap is $150 a month for a membership covering one person and $300 a month for a membership covering more than one person.

Annual billing is allowed. In IRS Notice 2026-5, Q-13 says fees may be billed for periods of more than a month and up to a year, provided they are fixed, periodic and within the monthly limit on an annualized basis.

The IRS's own 2026 example for one person is $1,800 for a year, $900 for six months or $450 for three months. Since the 2027 cap is unchanged, a year for a membership covering more than one person can be up to $3,600.

Three timing details are worth knowing. Q-19 says an HSA may treat the fee as incurred on the first day of each month of coverage, on the first day of the coverage period or on the date the fee is paid, so a member can reimburse an annual prepayment right away, even before the year starts. Q-18 says fees an employer pays, including through salary reduction, cannot be reimbursed from the employee's HSA. And because HSA members need to substantiate what they paid, an annual receipt should show the coverage period, not only the payment date.

One more point affects price changes. When you raise prices, check every billing period of every tier against the cap again, including the annual ones, and give members the notice your state requires (our guide to raising DPC membership prices covers the timing). Ask a CPA how a member should handle a partial refund of a fee that was paid from an HSA, since that is a tax question for the member. Our full guide to DPC HSA rules for 2027 covers what qualifies and what does not.

Annual Billing, Failed Payments and Renewals

Monthly memberships fail in small, frequent ways. Cards expire, banks flag recurring charges and members forget to update a card after a fraud alert. Billing tools can retry automatically. Stripe recommends its Smart Retries, which it turns on by default for new accounts, though it does not retry hard declines. Our guide to membership billing decline follow-up covers a friendly message that gives the member a chance to update their card.

Annual memberships fail less often but in a bigger way. The renewal charge is one large payment, often on a card the member has not used with you for a year, and a decline at renewal can quietly end a membership if nobody notices. That makes the renewal date the moment to watch. Reach out a month or two ahead, confirm the card on file and remind the member what the year included, as described in our guide to membership renewal tracking.

Annual billing can also hide early warning signs. A monthly member who is unhappy may cancel after a month or two, while an annual member may say nothing until renewal. Our guide to DPC patient retention and churn suggests checking in with quiet members during the year, and that habit matters even more for annual plans.

What DPC Billing Tools Support Annual Memberships?

The details differ by platform. Here is what each vendor's own pages say. Ask on a demo about anything not listed, such as how partial refunds of annual plans work.

If you build on Stripe Billing instead, you configure the recurring subscriptions yourself. Its guide to canceling subscriptions lets you cancel immediately, at period end or on a custom date, with a prorated refund, a full refund of the last payment or no refund. The same guide says that if you set a custom cancel date, you can't provide a refund.

If you are still choosing a platform, our comparison of DPC membership billing software for 2027 goes deeper on each.

Who Should Pick Which

• Pick Hint if you sell to employers, take eligibility files from a TPA, or want to keep your EHR and run only memberships and billing. Where it wins: employer billing and eligibility feeds; billing sold on its own, beside another EHR.
• Pick Atlas.md if you run a solo or small self-pay practice and want charting, billing, labs and an in-house pharmacy in one system at one per-provider price. Where it wins: one per-provider price with unlimited patients; an in-house pharmacy with unlimited inventory.
• Pick Stripe if you have someone technical and are comfortable building your own billing. Where it wins: recurring subscriptions with custom billing logic.
• What Tabflows does not do: bill memberships or charge cards; chart visits or prescribe.

A Simple Way to Decide

For most new practices, a monthly default with an optional annual plan is the easiest setup to run well. Work through these steps before you add an annual option:

1. Read your state's DPC statute for prepaid fee, trust account and refund rules.
2. Price the annual plan so it stays at or under twelve times the HSA cap for each tier.
3. Choose a discount from your own numbers, knowing card fee savings are small.
4. Write the refund formula, notice period and closure terms into the agreement.
5. Keep unearned prepayments separate from operating cash.
6. Set up renewal reminders a month or two before each annual end date.
7. Track how many members choose annual and how many renew, alongside your other DPC metrics.

The billing system usually handles the charge itself well. What slips is the work around it, such as the renewal reminder, the refund math when someone moves mid-year, the receipt an HSA member needs and the note in the chart that a member cancelled. That work lives across the billing platform, the EHR and the inbox. Tabflows is a dedicated tech team that connects the tools a clinic already uses, so those follow-ups, tasks and the patient context behind them land in one place and get done.

Annual and monthly plans can sit happily side by side. Give members a clear choice, keep your refund promise simple and fast, and let the billing period be one more way your practice makes care easy to say yes to. You can browse the DPC finder to see how practices near you present their membership options.

Sources

Checked on November 5, 2026: stripe.com/billing. Checked on November 4, 2026: stripe.com/pricing, support.hint.com/en/articles/2138159-configure-membership-rates-and-billing-options, atlas.md/pricing, support.hint.com/en/articles/2138139-set-a-contract-length, hint.com/pricing, hint.com/core/find-your-price and atlas.md/help/view/additional-atlasmd-fees. Spot a wrong fact? Email a correction.