Merchants: Most Frequent Reasons for Card Declines
Eligible Product List: Eligibility Criteria
SIGIS Fact Sheet
Find answers to your questions:
Popular "HOW TO" Questions
Members must obtain a SIGIS Members Area login to access the information and the SIGIS Eligible Product List.
As noted above the Primary Contact for a SIGIS Member must have registered your name as a contact. To retrieve SIGIS Members Area login information, go to SIGIS Home. Click "LOG IN" located in the Member Login box. Enter your User Name and click Submit. Your Password will be sent to your active email address within 15-20 minutes. Please make sure you double check your spam box. If you do not know your User Name Click “Submit” and enter your company information on the following form.
SIGIS is a not-for-profit organization that was formed in 2007 to establish and manage an industry standard to support requirements published by the Internal Revenue Service (IRS) for the processing of Flexible Spending Account (FSA) and Health Reimbursement Arrangement (HRA) debit card transactions. The IRS requires merchants that sell prescriptions and/or over-the-counter medical items either: 1) support an “inventory information approval system” (IIAS) or 2) qualify as a “90% Rule” pharmacy or drug store. SIGIS manages voluntary industry standards and services to enable the usage of FSA and HRA debit cards in accordance with IRS requirements.
SIGIS is a membership company that has a broad range of participants, including merchants, card issuers, third-party plan administrators (TPAs), merchant acquirers, processors, financial institutions, trade associations groups, software vendors, and payment card networks.
The IRS requires many merchants selling health care eligible products to support an Inventory Information Approval System (IIAS). The IIAS system is a combination of inventory management and point of sale systems that 1) confirm the health care eligibility of items purchased with an FSA or HRA card, 2) generate a payment transaction that contains the required IIAS information, and 3) includes an information archive system that allows the merchant to respond to a IRS audits as required.
The components of an IIAS system will typically include:
In addition to supporting a system capable of handling IIAS transactions, a merchant must also join SIGIS by completing a Membership Agreement, complete a Merchant Self-Assessment / Checklist and complete certification with their Acquirer. These materials can be completed online at the SIGIS website. Alternately, merchants that qualify for 90% rule may enroll in that program.
Currently, merchants that are registered under the 90% Rule do not need to undertake any technical work. Issuer processors will use the Store ID/Card Acceptor ID field in authorization requests to approve FSA/HRA card transactions at registered stores. Over the longer-term, there may be additional technical requirements that will be published with lead-time for implementation support. Current SIGIS requirements for drug stores and pharmacies who wish to register under the 90% program are:
Once the application is submitted, SIGIS will send a confirmation to the merchant registrant and its acquirer via email. It is extremely important that merchants double check the information sent in the email. Any errors may result in transaction declines.
The most efficient means of contact is to email the SIGIS Help Desk with your questions or comments, at email@example.com. Your request will be processed within two business days.
The SIGIS mailing address is:
SIGIS - Special Interest Group for IIAS Standards
111 Deerwood Rd. Ste.200
San Ramon, CA 94583
You may also contact SIGIS Help Desk at (925) 855-3228. SIGIS live operators are available between 6:30 am to 3:00 pm PST Monday - Thursday, and 6:30 am to 2:30 pm PST on Fridays, excluding major holidays to answers calls. If all our operators are busy, please leave a voice mail message. It will be returned within one business day.
The SIGIS fax number is (925) 855-3229.
Based on the IRS requirements, the merchant will have to re-register each year and attest that the gross sales of a store meet the 90% Rule. There will be an annual registration requirement to meet IRS rules that will be driven by the merchants tax year end date.
This is a separate process from payment of annual SIGIS membership dues. Both must be completed once a year.
No. A merchant is not required to implement an IIAS; however, FSA/HRA card issuers will not be able to approve FSA/HRA card transactions when a merchant does not support an IIAS. If you are a merchant and choose not to implement an IIAS, you do not need take additional steps. Merchants that are pharmacies/drug stores and primarily sell prescriptions and medical items may qualify under the IRS rules as a “90% Rule” merchant. See the 90% Rule Merchant FAQs for more information.
For merchants that would like to accept the FSA/HRA cards from their customers, the IRS requires Merchants selling health care eligible products to support an Inventory Information Approval System (IIAS). The IIAS system is a combination of inventory management and point-of-sale systems that can verify the health care eligibility of items purchased with an FSA or HRA debit card, generate a payment transaction that contains the required IIAS information, and includes an information archive system that allows the merchant to respond to an IRS audit(s) as required. As noted above, for Drug Stores / Pharmacies where 90% of the sales on a store-by-store basis qualify as FSA-eligible, a 90% Rule registration program is an alternative option.
Merchants have the option to not become a Member of SIGIS by establishing their own IIAS standards or 90% Rule Exemption and working with third-party plan administrators individually.
With the IIAS Certification developed by SIGIS, a non-profit standards organization, a broad range of participating merchants have been able to implement a solution that is recognized industry-wide, which enables acceptance of most FSA/HRA payment cards. Likewise, third-party plan administrators have implemented a common set of procedures that are applied to IIAS transactions at participating merchants.
The basis for the Membership Tiers is to enable different levels of participation in the activities of SIGIS. Progressively, the rights and responsibilities to the management increase with each Tier level starting with Tier IV.
TIER IV: Tier IV Membership is a basic membership that enables merchants to complete either 90% Registration for the 90% Rule or SIGIS IIAS Certification. All Members may download the SIGIS Eligible Product List as well as other resource information in the Members Area of the SIGIS website. Tier IV Membership does not provide rights to participate in work groups or nominate persons to the Board of Directors. The annual membership dues are $100.
TIER III: In addition to Tier IV rights, Tier III Membership grants the ability to name individuals to participate in other working committees. The annual membership dues are $750.
TIER II: In addition to Tier IV and Tier III rights, Tier II Membership grants the ability to be nominated and elected by Tier II Members to the Board of Directors and to the Management Committee. The annual membership dues are $3,750 plus a onetime initial fee.
TIER I: In addition to Tier IV, Tier III and Tier II rights, Tier I Membership grants the ability to be have a seat on the Board of Directors. The annual membership dues are $7,500 plus a one-time initial fee and capital call.
The source of the SIGIS Eligible Product List includes most nationally-distributed, regular-stock items. As such, the following types of items will generally not be included: items specially created for an individual merchant (including but not limited to private label items); a local, regional, or specialty item; bonus items (e.g., 2 ounces 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.
Private label/store brands will generally not be available for inclusion on the standard list produced by SIGIS. It is understood that some of these private label/store brand items are, in fact, eligible under IRS Code Section 213(d), and therefore, can be processed through the SIGIS IIAS. 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 SIGIS Home.
Additionally, dual-purpose items are not included as part of the standard list. These products may have both a medical purpose and a personal/cosmetic or general health purpose. Merchants are not permitted to identify dual-purpose items as eligible items in their IIAS solution. Examples of dual use items that would not be included:
FSA/HRA cardholders that have a doctor's order for dual-purpose items may submit their sales receipt along with the additional information required by their plan administrator and receive a manual reimbursement. The IRS has specific categories that are designated as eligible medical expenses and those that are not. Merchants should not make assumptions that “health care” products are IIAS-eligible. Merchants will find the Eligible Products Criteria document to be helpful in understanding the categories of eligible, non-eligible and dual-purpose items. The current Eligible Products Criteria document may be found on the SIGIS website.