Participating Pharmacies
Inventory Information Approval System (IIAS)
The IRS requires select retailers – including pharmacies, supermarkets, grocery, discount stores, wholesale clubs and mail-order merchants, to identify health-related items at the point of sale using the Inventory Information Approval System (IIAS). IIAS makes it possible to identify Card transactions at the check-out counter. This insures that you can only use the Card for eligible items, and does away with the need to submit receipts for verification after the purchase.
What Does IIAS Mean For You?
The eligibility of all items purchased with your debit card will be verified at the point of services. The purchase of ineligible items with your debit card will be declined. In most cases you will not be required to submit receipts for eligible transactions.
90% Merchant Rule
The IRS established the 90% Rule as an exception to the IIAS requirement for pharmacies that can certify 90% of the pharmacy’s gross receipts during the previous year must consist of products that qualify as expenses for medical care under Section 213(d) of the IRS code. A qualified medical or health care expense includes nonprescription medications such as over-the-counter products in addition to prescription drugs. Employee benefit plans may choose (but are not required to) accept FSA and HRA card transactions from 90% merchants. IMPORTANT: Transactions at those merchants meeting the 90% exception still generally require substantiation by the participant.
PLEASE NOTE: As of January 1, 2011, FSA, HRA and HSA funds may no longer be used to purchase over-the-counter medications unless they are prescribed by a health care professional.