Eligible Product List Criteria

Eligibility Status Definitions

Eligible Services for IIAS Approval

Eligible services for inclusion in the IIAS total include the provision of health care services including diagnostic tests, flu shots and other vaccinations and urgent care or primary care office visits including services provided at pharmacies or store.

Eligible Products for IIAS Approval

Eligible Devices and Supplies / OTC Medicines and Drugs: Eligible products include OTC devices, supplies and other products that are for medical care and are primarily for a medical purpose. They include products, including OTC medicines or drugs with or without a prescription that diagnose, alleviate or treat existing or imminent injuries, illnesses or medical conditions, or used for the prevention of disease, or for the purpose of affecting the structure or function of the body. As a general rule, most of these products are of short-term use but some do treat chronic medical conditions. Qualified medical expenses include those over-the-counter items compliant with federal tax rules under IRS Code Sections 213(d), 105(b) and 125 as outlined by the Internal Revenue Service. In these cases, the expense would not have been paid “but for” the disease or illness. Much of the guidance the IRS has provided relates to the deductibility of medical expenses, as reimbursement plans operate under overlapping sections of the Code. An expense is not deductible as medical care if the taxpayer would have paid the expense even in absence of a medical condition or is merely beneficial to general health. This includes Personal Protective Equipment (PPE) with the primary purpose of preventing the spread of the Coronavirus Disease 2019 (COVID-19 PPE), masks and all forms of alcohol-based hand rub (ABHR) sanitizers are considered eligible expenses. In order to be considered eligible the product must meet the Centers of Disease Control (CDC) and Prevention standards as it relates to COVID-19. OTC products that contain drug facts are not automatically eligible and are still subject to IRS Code Section 213(d). They must meet qualifications described above and treat a specific medical condition to qualify as a medical expense. All dietary supplements, with the exception of glucosamine products, fiber laxatives and prenatal vitamins, are dual-purpose, regardless of product category due to the general wellness component.

Manufacturer Kits may contain multiple items tied to a theme that are medical condition specific (for example, an emergency kit, breast pump supply kit, allergy kit). Since these kits contain multiple items, there may be eligible, dual-purpose and non-eligible items in a particular manufacturer's kit. In review, the primary purpose to treat a medical condition will be key in determining if the kit is eligible.

Merchant Bundles consist of multiple items designed to offer convenience to consumers during purchases. To qualify for listing, each individual item within the bundle must independently meet eligibility criteria listed in the Eligible Product List Criteria document. However, the bundles themselves will not be listed on the Eligible Product List. When assembling bundles, merchants must adhere to IRS guidelines regarding products intended "for the prevention and treatment of a medical condition" and avoid "stockpiling" (amounts purchased that cannot reasonably be used within a plan year). It is recommended that bundles primarily focus on products closely related to treating a specific medical condition. Bundles that include products that encompass a wide range of medical conditions may no longer support treating a medical condition for an individual consumer or households, potentially classifying them as general wellness rather than eligible medical items. Mystery box bundles selected by the merchant for the consumer are prohibited.

The user does not need to provide a statement from a medical provider or indicate a diagnosis in order to receive reimbursement as long as the item is on the Eligible Products List for IIAS Approval. Taxes, shipping and surcharge/convenience fees (as permitted by law and card brand/network regulations) directly associated with the purchase of an eligible product can be included.

Prescribed Drugs and Medicines, including Prescribed OTC: Drugs and medicines prescribed by a licensed medical professional and dispensed in accordance with state laws including the generation of an Rx Number are considered Eligible by the IRS. This includes OTC drugs and medicines other than dual-purpose. Since the prescription serves as the determination of medical eligibility in a merchant location with a properly configured Pharmacy and IIAS POS system, no additional checks are required. These items will not be listed on the Eligible Products list due to their separate processing rules.

Not Included as Eligible Products for IIAS Approval

Dual-purpose: Some products are considered dual-purpose. These products may have both a medical purpose and a personal hygiene, cosmetic or general health purpose. In order to be considered eligible, they must be used to treat a medical condition and cannot be used to improve or maintain general health unless prescribed by a licensed health care professional to treat a specific illness, condition or injury. All dietary supplements, with the exception of glucosamine products, fiber laxatives and prenatal vitamins, are dual-purpose, regardless of product category due to the general wellness component. These products may be eligible for reimbursement but require a Letter of Medical Necessity (LOMN) from a licensed healthcare professional stating the specific diagnosis or medical condition, the specific OTC medicine or product recommendation, why it is needed to treat the condition and the duration of the treatment. Consumers will follow the plan administrators process for submitting a manual claim reimbursement.

Ineligible: Products that are used for general health, cosmetic, or personal hygiene purposes are not reimbursable. Typically, these are not referred to as medicines or drugs and are not recognized to treat a medical condition. Expenses that are not reimbursable as medical care under IRS Code Section 213(d) and related sections of the federal tax code are ineligible. These include food supplements, toiletries, lotions and soaps, shampoos, and most herbal supplements. According to IRS Publication 502, you can’t include in medical expenses the cost of nutritional supplements, vitamins, herbal supplements, “natural medicines”, etc., unless they are recommended by a medical practitioner as treatment for a specific medical condition diagnosed by a physician. These items are taken to maintain your ordinary good health and aren’t for medical care.

The source of the list includes most nationally-distributed, regularly-stocked items. As such, the following types of items will generally not be included: items specially created for an individual retailer (including but not limited to private label items); a local, regional, or specialty item; bonus items (e.g. 2 oz. free); BOGOS (buy one, get one), or other in-and-out types of packaging with limited availability or distribution. Although these items will not be included in the data, they may in fact be eligible. If such circumstances exist or if one feels other items meet the eligibility criteria then they can be submitted through the add process on the SIGIS website. These will be reviewed by the SIGIS List Committee and qualifying items will be added to the eligible product listing.

Because the source of the list is nationally-distributed, regularly-stocked products, private label and store branded products will generally not be available for inclusion on the standard list produced by SIGIS unless submitted by a member. It is understood that some of the private label and/or store brand items are, in fact, eligible under IRS Code Section 213(d), and therefore, can be processed through a certified SIGIS IIAS merchant. Merchants that choose to supplement their inventory of SIGIS identified eligible items with their own private label items are free to do so by following the process detailed in the Private Label Eligibility Criteria document. That document can be found at  https://sig-is.org/download?ContentID=21400.

Classifications and Examples

The following are types of products that typically would be included under each designation. These are strictly guidelines and do not represent an all-inclusive listing.

Eligible: Devices and Supplies

If the primary purpose of a product is for medical care, and there is no “normal” or general health use that is not medical, it could automatically qualify as eligible.

OTC Medicines and Drugs (Included in Eligible Product List):

If the primary purpose of a product is for medical care, and there is no “normal” or general health use that is not medical, it could automatically qualify as eligible.

Dual-purpose (Not Included in Eligible Product List):

Products that have both a medical purpose and a person hygiene, cosmetic, or general health purpose. These will require a diagnosis letter of medical necessity from a provider for reimbursement. All dietary supplements, with the exception of glucosamine products marketed for arthritis, fiber laxatives and prenatal vitamins, are dual-purpose, regardless of product category due to the general wellness component.

Other Ineligible Products

Products that have a personal hygiene, cosmetic, or general health purpose. These will not be eligible for reimbursement.

Reporting items to include or delete

SIGIS members can use the Missing Product Form available via the Members Area by logging in at www.sig-is.org to request items to be added or deleted. Member submissions should follow the EPL Criteria document above. Incomplete information will not be considered.

List Availability

The list is generally available by the 15th day of each month. Items for the List Review Committee to be considered for addition or deletion from the SIGIS List must be submitted by the indicated date on the calendar (between the 18th and 23rd based on the particular month) to be considered for next month’s updates. Members see the EPL List Calendar for exact timing (see the members area under EPL Resources).

Notes

It has been reported that some merchants are unable to include a SIGIS eligible healthcare product that may also be eligible for purchase via the Food Stamp program. Should this present a problem for any merchants, it is recommended that they should eliminate it from the SIGIS data and classify it for Food Stamp eligibility, as the consumer may submit the item for manual reimbursement from their flexible spending or health reimbursement arrangement account.

Updated November 19, 2024

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