|
New IRS Guideline for Pharmacies -- IIAS and 90% Rule |
|
Effective
July 1, 2009
Brief Overview:
As of July 1, 2009, all pharmacies, grocery stores, discount stores, and online pharmacies must be IIAS compliant in order for FSA/HRA debit cards to be accepted.
The inventory information approval system (IIAS) is technology used by retailers to ensure all FSA/HRA card transactions are eligible expenses under IRS regulations. Every item in the store's scanner database is flagged "yes" or "no" for plan eligibility. The new IRS regulations prevent participants from purchasing ineligible items with their FSA/HRA card.
IIAS provides an alternative for merchants who do not wish to implement IIAS. This exception is the referred to as the 90% Rule. The rule is based on a store by store location where 90% of a store’s gross receipts during the prior tax year consisted of items which qualified as approved 213 (d) medical expenses (including non prescription medication). If a store meets this requirement they do not need to be IIAS complaint. Debit cards, including the AdminPro Benefits Card, will be allowed to be used at these stores; however transactions will not be auto substantiated like the IIAS. They may, however be auto-substantiated by other means such as copay or recurring substantiation. As a result, some participants will experience card declines if their merchants are not viewed as compliant by the IRS. In this situation, participants have the option to complete the transaction using personal funds and then file the claim manually or to switch to merchant that is IIAS complaint.
|
IIAS Merchants List | |
| The Details: Beginning Wednesday 7/1/2009, all Drug Store/Pharmacies (MCC 5912) and Druggist/Druggist Proprietaries (MCC 5122) who accept FSA/HRA debit cards must be IIAS compliant in order for healthcare debit cards to be accepted. IIAS IIAS stands for Inventory Information Approval System. The IRS mandated that merchants, with specific merchant category codes (MCCs) implement an IIAS compliant POS device that will split out 213 (d) eligible transactions from non-compliant transactions. The IIAS system only allows healthcare debit cards to be utilized against the compliant products. If the product is compliant, the transaction is substantiated. Non-compliant transactions are denied at the point of sale (POS). IIAS has been in place for all grocery stores, discount stores since the beginning of 2008. This rule is now being extended to pharmacies. IIAS provides an alternative for merchants who do not wish to implement IIAS. This exception is the referred to as the 90% Rule. The rule is based on a store by store location where 90% of a store’s gross receipts during the prior tax year consisted of items which qualified as approved 213 (d) medical expenses (including non prescription medication) as described in Rev. Rul, 2003-102., 2003-2 C.B. 559) If a store meets this requirement they do not need to be IIAS complaint. Debit cards, including the AdminPro Benefits Card, will be allowed to be used at these stores; however transactions will not be auto substantiated via IIAS. They may however be auto-substantiated by other means such as copay or recurring substantiation. Up until this point, AdminPro Benefits Card participants have been able to use their debit card at any merchant who has the merchant category code of 5122 and 5912. However, on July 1, 2009 their debit card will only be accepted at merchants who meet the IRS IIAS or 90% Rule regulations. Some participants will experience card declines if their merchants are not viewed as compliant by the IRS. In this situation, participants have the option to complete the transaction using personal funds and then file the claim manually or to switch to merchant that is IIAS complaint.
|
||
Check Your Balance Savings Example Request Information FSA Debit Card Home Contact Us