Pharmacies and Drugstores IIAS Transition Period Expires June 30, 2009
6/16/2009
As you may know, the IRS issued new regulations in 2007 limited the use of health FSA debit cards to health-care related merchants and merchants who have an Inventory Information Approval System (IIAS) in place. IIAS is an automated system put in place by a merchant that approves eligible medical expenses at the point of purchase by matching the item's SKU to a list of eligible expenses. Overall, IIAS has been a great success by helping to reduce the substantiation participants need to submit under the IRS guidelines.
A special transition period is in place that allows use of the debit card at pharmacies and drugstores as health-care related merchants. This special transition period is to end June 30, 2009.
We want to remind everyone of the impact the change will have on pharmacies and drug stores on July 1, 2009. After June 30, 2009, health FSA debit cards may not be used at pharmacies or drug stores unless the location has IIAS in place or, the store or pharmacy certifies that on a location-by-location basis, 90% of the pharmacy's gross receipts consist of items that qualify as expenses for medical care under Section 213(d), including non-prescription medications. Without IIAS or if a pharmacy does not certify it meets the 90% requirement, the debit card will be denied at the point of service.
You will no longer need to submit documentation to Discovery Benefits if the purchases are made to the retailers that are listed on our website ("IIAS Merchants"). These merchants will approve eligible expenses at the point of purchase.
How the Card Will Work When Used at an IIAS Merchant
You will swipe card for entire purchase
Eligible items will be auto substantiated
Merchant will ask for second form of payment for non-eligible items
Documentation may be required if not auto substantiated at the point of sale. Please visit our site and review the list to see if your favorite pharmacy or drug store is setting up IIAS.
Categories: HSA, HRA, FSA