Hydraulic fracture closure plays an important role during the production of hydrocarbons. Modeling this closure is crucial for production performance evaluation and optimization. Conventional fracture closure models focus on the fracture domain and model the reservoir-fracture coupling using relatively simplistic analytical models. We have developed a model that couples the flow and width in the fracture with the flow and displacement in the reservoir domain. We represent hydraulic fractures as a discontinuity in the poroelastic reservoir rock which helps in capturing the in-situ stress variations around a closing fracture more accurately. During shut-in, the fracture closes because of fluid leak-off till the rough fracture wall asperities come in contact. We use a non-linear relationship (Bandis et al. 1983), between normal stress acting on the fracture walls and the fracture width to simulate closure after contact. Simulation results show that the impact of fracture closure is significant for flow calculations. During production, the fracture conductivity becomes a function of the normal stress acting on the fracture walls, decreasing rapidly with increasing closure stress. This results in a significant decrease in the area available for flow from the matrix into the fracture, and this effect becomes even more pronounced in the case of complex fracture networks. The fracture closure model provides a more accurate representation of the fracture-reservoir system, and hence improves the accuracy of production forecasts.