90% Registration

  • When can merchants begin completing a 90% registration or certification with the new PIN Standard?

    The new certification and registration process will be available to merchants and Third Party Servicers in the fall of 2012.  A notification will go out to all members once it is available.

  • Will merchants be required to re-certify to meet the Durbin requirement?

    As standards change, SIGIS may create optional or mandatory Addendums to certifications to cover changes/additions to the standard. SIGIS may also determine that re-certification is required.  Please review the scenarios below.

    IIAS

    SIGIS will allow those merchants that are opting to implement the PIN standard that have completed the IIAS Merchant Self Assessment form and are already certified to complete an Addendum to their existing certification. The purpose of the Addendum is to simplify the process so that a certified merchant does not have to complete a full certification form for the sole purpose of being certified for the changes/additions to the standard. Only merchants already certified may use the addendum. The addendum is acquirer / certification specific and will need to be completed for each existing certification that needs to be amended. To clarify, if a merchant is seeking a new certification / acquirer combination, they must use the full form.  To obtain the IIAS Merchant Certification Self-Assessment Addendum, please email certification@sig-is.org.

    Third Party Servicer

    If a Third Party Servicer (TPS) decides to add the ability to process PIN based FSA / HRA transactions to their software, the TPS will be required to complete a new certification, as they would if they were implementing new software.  Once certified, the TPS should then work with their existing certified merchants that have opted to utilize the PIN enabled software to submit a new TPS Merchant Certification with the new software.

    TPS Merchant

    Once the TPS has submitted their new certification and become certified with the PIN enabled software, the merchants that have opted to utilize the PIN enabled software will be required to submit a new certification.

    90% Registration

    A 90% merchant that decided to accept PIN debit transactions will need to update their registration with correct Acquirer Identifier (i.e., MasterCard ICA, Maestro ICA, Visa BIN, Interlink ID, STAR ABA, NYCE ID, ACCEL ID, PULSE ID) and the Merchant Store Identifier (i.e., MasterCard/Maestro, Visa/Interlink, STAR, NYCE, ACCEL, PULSE Card Acceptor ID).


  • 90% Rule Registered Merchants experiencing declines of FSA-HRA transactions

    Registering for the 90% Rule through SIGIS allows a merchant to accept FSA and HRA cards under the IRS guidelines; however, SIGIS cannot guarantee 100% acceptance of cards at these merchant locations. Third-party plan administrators (TPAs) of employer benefit plans have the right to either accept or decline transactions from merchants who self certifiy under the 90% Rule based on the plan rules set up by the TPA and the employer sponsoring the program. The TPA may require auto-substantiated transactions available through SIGIS IIAS Certification. In this case, 90% Rule Registration Merchants may experience declines of card processing by the TPA. If a merchant experiences a high percent of declines from TPA(s), and has a POS system, the merchant may want to consider obtaining SIGIS IIAS Certification.

  • What is the 90% Rule Registration?

    Completing the 90% Rule Registration does not make a merchant IIAS-compliant. If a merchant registers to be designated as 90% Rule exempt, the merchant is stating that its store/stores are exempt from the IRS requirement to have IIAS standards in place.

    1. Go to the SIGIS home page at www.sig-is.org and log in to the SIGIS MembersArea.  Download the 90% Rule Program Implementation Procedures Guide listed under the "Announcements" section.
    2. Contact your processor/acquirer (the company that you have engaged to accept credit card payments) to complete Appendix B located on pages 5-6 of SIGIS 90% Rule Program Implementation Procedures guide.
    3. Return to the SIGIS home page at www.sig-is.org and log in to the SIGIS Members Area.  Select the Certification and 90% Forms link under the "Announcements" section to complete the online registration form. Members are able to enter multiple DBA(s) under one Primary Organization (SIGIS Membership).

    An email will be sent to the merchant to confirm completion of Registration. The merchant’s store(s) will then be listed on the SIGIS website as a 90% Rule merchant which has self registered as complying with the IRS 90% Rule.

    Important Notice: If a merchant does not Register for the 90% Rule Exemption or has not implemented an IIAS standard, the Merchant will find that transactions by customers with FSA/HRA cards are declined by card issuers in compliance with IRS regulations.


  • What is the IRS 90% Rule and how does it relate to IIAS requirements?

    In IRS Notice 2007-02 and the subsequent Notice 2008-104, the IRS provides that drug stores/pharmacies (MCC's 5912 and 5122), which have 90% or more of gross sales that are Rx/prescriptions or over-the-counter Eligible Health Care Products, can be viewed as "health care merchants" by plan administrators in the debit card programs. Plan administrators are permitted to approve FSA/HRA card transactions at a drug store/pharmacy that meets the 90% Rule, if the drug store/pharmacy doesn't support an IIAS. The text of the IRS rulings are shown below:

    IRS Notice 2007-2:

    Accordingly, after December 31, 2008, health FSA and HRA debit cards may not be used at stores with the Drug Stores and Pharmacies merchant category code unless (1) the store participates in the inventory information approval system as described in Notice 2006-69, or (2) on a store location by store location basis, 90 percent of the store's gross receipts during the prior taxable year consisted of items which qualify as expenses for medical care under Section 213(d) (including nonprescription medications as described in Rev. Rul. 2003-102, 2003-2 C.B. 559).

    IRS Notice 2008-14- Transition Relief:

    The deadline in Notice 2007-2 is extended by six months so that, after June 30, 2009, health FSA and HRA debit cards may not be used at stores with the Drug Stores and Pharmacies merchant category code unless the requirements of (1) or (2) above are satisfied.


  • What types of drug stores/pharmacies are likely to meet the 90% Rule requirement?

    As a general answer, it is felt that pharmacies operating in hospitals or medical buildings which mostly fill prescriptions and have a very limited availability of other merchandise would be able to qualify as 90% Rule stores. Additionally, there are specialty pharmacies, such as compounding pharmacies, which primarily sell Rx/prescriptions and may qualify. But in all cases, the drug store or pharmacy must be able to attest that 90% of the previous year's gross sales of the store are from Rx/prescriptions and Eligible Health Care Products.

  • Where can cardholders, card issuers and plan administrators obtain a list of the 90% Rule registered merchants?

    There is a link to the 90% Rule Merchant List on the SIGIS Home Page. The SIGIS 90% Rule Merchant List contains the name and address of each store that eligible SIGIS Member merchants have registered. This is for informational purposes and should not be used for the actual authorization process. Issuer processors should rely solely on the 90% Rule SFTP Report for authorization as it contains the MCC, Visa BIN/Interlink ID, MasterCard ICA/Maestro ICA, STAR ABA, NYCE ID, ACCEL ID, PULSE ID and CAID codes to uniquely identify merchant store locations during the authorization process.

  • What is the Card Acceptor ID (CAID) and what is the length?

    The Card Acceptor ID is typically assigned for each store location and is a number between 1 and 15 digits long identifying a store location. In some cases, the number may contain a dash, "-". If a merchant needs assistance determining this number, its acquirer or service provider can provide assistance.

  • What is an Acquirer's MasterCard ICA number?

    It is a 6-digit number assigned by MasterCard to each acquirer. If a merchant has different acquirers for Authorization versus Settlement, the merchant will have a separate ICA for each one. SIGIS is only collecting the Authorization Acquirer ICA at this time.

  • What is an Acquirer's ACCEL ID?

    It is a 6-digit number assigned by ACCEL to each acquirer. If a merchant has different acquirers for Authorization versus Settlement, the merchant will have a separate ACCEL ID for each one. SIGIS is only collecting the Authorization Acquirer ACCEL ID at this time.


  • What is an Acquirer's Maestro ICA Number?

    It is a 6-digit number assigned by Maestro to each acquirer. If a merchant has different acquirers for Authorization versus Settlement, the merchant will have a separate ICA for each one. SIGIS is only collecting the Authorization Acquirer ICA at this time.

  • What is an Acquirer's NYCE ID?

    It is a 6-digit number assigned by NYCE to each acquirer. If a merchant has different acquirers for Authorization versus Settlement, the merchant will have a separate NYCE ID for each one. SIGIS is only collecting the Authorization Acquirer NYCE ID at this time.

  • What is an Acquirer's PULSE ID?

    It is a 6-digit number assigned by PULSE to each acquirer. If a merchant has different acquirers for Authorization versus Settlement, the merchant will have a separate PULSE ID for each one. SIGIS is only collecting the Authorization Acquirer PULSE ID at this time.

  • What is an Acquirer's STAR ABA?

    It is a 6-digit number assigned by  STAR to each acquirer. If a merchant has different acquirers for Authorization versus Settlement, the merchant will have a separate STAR ABA for each one. SIGIS is only collecting the Authorization Acquirer STAR ABA at this time.

  • What is an Acquirer's Visa BIN number?

    It is a 6-digit number assigned by Visa to each acquirer. If a merchant has different acquirers for Authorization versus Settlement, the merchant will have a separate BIN for each one. SIGIS is only collecting the Authorization Acquirer BIN at this time.

  • What are the 90% Rule program requirements?

    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:

      • Must become a Member of SIGIS by completing the online Membership Application and paying the appropriate annual membership fee.
      • Completes the SIGIS, online 90% Rule Merchant Registration. During online registration, merchants will be asked to attest that each store registered meets the IRS requirements for the 90% Rule. The following information will also be needed from the merchant’s acquirer in order to successfully complete the form:
          • The acquirer's MasterCard ICA number
          • The acquirer's VISA BIN number
          • The acquirer's Maestro ICA number
          • The acquirer's Visa Interlink ID
          • The acquirer's STAR ABA number
          • The acquirer's NYCE ID number
          • The acquirer's ACCEL ID number
          • The acquirer's PULSE ID number
          • The drug store/pharmacy's Card Acceptor ID (each store has a different Card Acceptor ID) submitted in authorization requests. The Card Acceptor ID is sometimes referred to as the store's "merchant number" or "store location id".
          • The MCC code for your store locations. (Note only locations under 5912 and 5122 are eligible).

    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.


  • Is it expected that once a store is registered, that is all that needs to be done?

    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.


  • Will all FSA/HRA plan administrators permit their clients to use FSA/HRA cards at 90% Rule merchants?

    While a majority of plan administrators permit FSA/HRA cards to be used at 90% Rule merchants, there may be some that do not or whose employer clients do not permit it. This could mean that plan administrators in a merchant's market area may have elected not to authorize FSA/HRA card transactions at 90% Rule merchants.

  • If a merchant primarily sells medical and health care items, but is not a drug store or pharmacy, is 90% Rule Merchant registration permitted?

    No. The IRS is clear that 90% Rule registration is only permitted to drug stores and pharmacies. Merchants that sell medical/health care items or provide medical/health care services use a merchant category code (5912 and 5122) that identifies them as a health care merchant. Of course, merchants with a non-health care merchant category that sell Rx/prescriptions and/or qualified health care products may implement support for an IIAS.

  • Will a merchant’s store name be listed on the SIGIS Merchant List?

    SIGIS has two merchant lists: first, the SIGIS IIAS Merchant List for merchants that are SIGIS-certified to process IIAS transactions, and second, the SIGIS 90% Rule Merchant List for merchants that have registered with SIGIS as meeting the IRS requirement as a store with 90% or more of gross sales from Rx/prescription and qualified medical products.

  • If the CAID is different for each terminal in a store, what should a merchant do?

    Some merchants have a unique CAID for each terminal in the store, i.e., CAID 999999001 for the front of the store and 999999002 for the back of the store, that results in more than one CAID value being used in a single 90% location. Because the CAID is used in the authorization approval process for 90% Rule merchants, it is important for merchants to make sure all CAID's from qualifying stores are registered.

    If a merchant’s acquirer / acquirer processor is not able to support a single CAID for all terminals within the same store, the merchant may register each terminal in the 90% registration process. To do so, create a separate store location for each terminal. Except for the Location Name and CAID, all of the other information should be the same for both "locations". Here is an example of what the location Name and CAID fields would look like:

    Location 1 Name                 CAID
    Joe's Pharmacy (Term#1)    999999001

    Location 2 Name                 CAID
    Joe's Pharmacy (Term#2)    999999002

     

    **Please note that the merchant still must comply with the IRS regulation that the determination of eligible product percentage is at the total store level. If the total store qualifies, you may register all terminals. If the total store does not qualify, a merchant is not allowed to register any terminal for that store. When inputting the percent of gross sales, use the same value for all terminals in that store location.


  • What if the pharmacy window in a merchant’s stores would qualify under the 90% Rule, can the merchant register the cash register/POS terminal of the pharmacy area?

    No, that will not be permitted. The IRS requirement is that the gross sales of each store must be qualified as having gross sales that are at least 90% from Rx/prescriptions and over-the-counter Eligible Health Care Items.

  • What happens if a merchant changes acquirers?

    If a merchant should change acquirers after registering online with SIGIS, the merchant will need to update its registration with the new information. It is important to note that the merchant will need to update all of the information or risk transaction declines. Be sure that registration information is updated with all new information, i.e., the acquirer's MasterCard ICA, Visa BIN, Maestro ICA, Interlink ID, STAR ABA, NYCE ID and Card Acceptor ID. Ensure that the timing of the update of the 90% Rule registration aligns with the timing of the actual conversion. Doing too early or too late can lead to card declines. Since the SIGIS 90% Rule Merchant information is published to issuer processors each Monday morning, SIGIS recommends that the merchant / acquirer plan the change for a Monday morning with the merchant updating their information in the SIGIS 90% form, the Friday before conversion.

  • What if a plan administrator and/or consumers have questions or inquiries about a possible error with the SIGIS 90% Rule merchant information, who will address the questions?

    Consumers contact their plan administrator to ask questions about merchants at which their FSA/HRA card will work. Only plan administrators can answer these questions. Plan administrators should research cardholder questions via their transaction processing systems to determine what may have caused a cardholder's problem. If the plan administrator believes that SIGIS 90% Rule merchant information may not be accurate, they should contact their card issuer processor for assistance.

  • Will merchants that register as SIGIS 90% Rule merchants need to flag their inventory using the SIGIS Eligible Product List?

    No. Merchants that register for the 90% Rule are not required to flag their inventory. Merchants will find the SIGIS Eligible Product List helpful in determining if 90% or more of gross sales are from Rx/prescriptions and Eligible Health Care Products.

  • How often is SIGIS 90% Rule merchant information updated?

    SIGIS will post an updated SIGIS Member merchant file weekly on Mondays by 5am pst with changes (adds, deletes, modifications) so that issuers/issuer processors may access the updated information. In addition, SIGIS will post a full replacement file each week. Issuers/issuer processors must update and post updated 90% Rule merchant information no less than once a month. It is highly recommended that the file be picked up and applied each week.

  • How do FSA/HRA card issuers know which merchants have registered with SIGIS?

    SIGIS will publish a list of SIGIS Members that have registered as 90% Rule merchants. Additionally, SIGIS will publish the acquirer IDs and Card Acceptor IDs of these merchants each week. Issuers and issuer processors that elect to participate in the 90% Rule should use the 90% Rule SFTP Report. The issuer processor should use the MasterCard ICA, Visa BIN, Maestro ICA, Visa Interlink ID, STAR ABA, NYCE ID, ACCEL ID, PULSE ID, CAID and MCC code in the authorization process to determine if it is a 90% Rule merchant. Other fields should not be used, as doing so may cause unnecessary declines. The public 90% Rule report should be used as an informational guide when working with merchants. Issuer and issuer processors must be a SIGIS Member to download the list.

  • Does a merchant need to implement an IIAS system based on its merchant category code (MCC)?

    Potentially, yes. The IRS states that cardholders’ use of a FSA/HRA card is limited to merchants and service providers with specific merchant category codes (MCC) related to health care, including physicians, dentists, vision care offices, hospitals, and other medical care providers. The FSA/HRA card can also be used at merchants or service providers that do not have health care related merchant category codes, provided that those non-health care related merchants or service providers use an Inventory Information Approval System (IIAS). It is required that attempts to use FSA/HRA cards at merchants or service providers without a health care related MCC code and who have not implemented an IIAS be declined.

    An IRS ruling highlighted merchants in categories such as supermarkets, grocery stores, discount stores, wholesale clubs, mail order vendors and web-based vendors that sell prescription drugs as examples of merchants that would not be considered health care related and would therefore fall into the class of merchants requiring the implementation of the IIAS system. Because of the broad range of the merchandise sold by many drug stores or pharmacies, the IRS has also specified that drug store and pharmacies are not to be considered medically related, and thus, must implement an IIAS capability. Additionally, drug stores and pharmacies where 90% of their products sold qualify as medically eligible items may qualify for the 90% rule exception.


  • Confirm your 90% Rule Self-Registration status

    As a paid Member of SIGIS in good standing, a merchant is able to confirm the status of its SIGIS Registration for the 90% Rule Exemption by going to www.sig-is.org and clicking on 90% Rule Merchant List. If the merchant’s organization is not on the list, the merchant will need to complete the online form to complete registration for the 90% Rule.

    Please note that the list is updated each Monday morning.


  • Could a merchant’s acquirer Visa BIN number and acquirer MasterCard ICA be the same number?

    While it is possible that they could be the same number, it is highly unlikely. If you have been provided the same number for both by your acquirer, please contact them and ask them to re-verify the numbers provided.

  • Could a merchant’s Authorization Card Acceptor ID and Settlement Card Acceptor ID be the same number?

    Yes, it is highly possible that they are the same number. An exception to this would be if the merchant were to use multiple acquirers. SIGIS is capturing only the Authorization Card Acceptor ID.

  • What if some of a merchant’s stores meet the 90% Rule, but others do not?

    The IRS is clear that only stores whose gross sales are at least 90% from Rx/prescriptions and over-the-counter Eligible Health Care Products can be registered as qualifying for the 90% Rule. If a merchant has other stores that do not meet the 90% Rule, the merchant will need to implement IIAS capabilities in order for FSA/HRA card transactions to be approved. Alternatively, it is possible that an assessment of the costs and benefits may suggest that the merchant would just continue to accept payment cards as they do today without an IIAS. If so, it is likely that FSA/HRA card authorizations would not be approved.

  • What does SIGIS do to verify that 90% or more of the gross sales of a registered store are from Rx/prescriptions or qualified over the counter (OTC) health care products?

    The SIGIS 90% Rule Merchant Program is a self-registration, not certification, program. SIGIS does not investigate or audit the financials of registered 90% Rule stores to qualify stores for registration.

  • If a merchant can qualify its stores under the 90% Rule, will customers that pay with a FSA/HRA card need to submit sales receipts to their plan administrator?

    Generally, yes. Unlike an IIAS where the merchant substantiates the items being purchased at the point of sale, the 90% Rule indicates that stores that qualify as 90% locations can be viewed as "health care merchants." This means that plan administrators will apply their standard substantiation processes to transactions at these locations - and the customer may be asked to submit a sales receipt to document that the items being purchased were Rx/prescriptions or Eligible Health Care Products. It is possible that in some cases the card issuer processor will be able to match a transaction amount with Pharmacy Benefit Management (PBM) system information, and can determine that the card transaction amount matches the plan's co-pay on prescriptions, for example. In this case, the customer may not be asked to submit a sales receipt. But in the absence of an automated matching program like this, it is likely that customers using a FSA/HRA card will be asked by their plan administrator to submit a sales receipt.

  • Who will have access to this information when a consumer has an inquiry?

    The SIGIS 90% Rule Merchant List is available to the general public via the SIGIS website. Specific questions about card declines and plan rules should be directed to the plan administrators' phone number on the back of the consumer’s FSA/HRA card.

  • How can a merchant combine 90% Registrations under one membership?

    Some members may have multiple memberships which qualify for combination to a single membership.  After contacting the Help Desk to confirm eligibility, please follow these steps to move the 90% Registration.

    1. Log in to the SIGIS Members Area under the old membership and copy down all required information from the 90% Registration form.
    2. Delete the locations under the old 90% form.
    3. Log in to the SIGIS Members Area under the new membership and create a new or update an existing 90% form utilizing the information you copied down from the old 90% form.

    Note:  It is critical that the deletion and addition happen on the same business day.  Failing to do so may cause transaction declines.  Once the 90% registration has been moved, Help Desk will work to inactivate the old membership.


  • Does SIGIS support IIAS and 90% Rule processes for US Territories?

    US Territories US Virgin Islands (USVI), Guam, Marianas Islands / Saipan (CNMI) and American Samoa operate under a variety of US tax laws.  Some mirror the US tax law while others are separate and distinct.  In summary:

    • US Virgin Islands (USVI) and Guam operate under a mirrored US tax law that supports Section 125 Cafeteria plans and an IIAS.  SIGIS supports retailers and consumers in these markets via IIAS and 90% Rule programs.
    • Puerto Rico has its own tax code that does not currently recognize Section 125 Cafeteria plans and IIAS.  SIGIS does not support this market.
    • American Samoa and Marianas Islands / Saipan (CNMI) have a combination of US and Local tax laws in effect.  Further research is required to determine if Section 125 applies in these markets and the impact of local tax laws. At this time, SIGIS does not support these markets.

    While SIGIS processes may support these locations members and consumers should consult with their counsel and plan administrators that operate in these markets to determine support for FSA, HRA and HSA debit cards.

    As of April 12th, 2011.


  • How do I add or remove locations to the Store Locator for my 90% Registration?

    1. Click the “Members Login” link and log into the Members Area.
    2. Select the “Certification & 90% Registration Forms” box on the right hand side of the page.
    3. Click on the 90% Registration tab.
    4. Click on the Update link next to your location.

    To change:

    a. To add, click the checkbox next to “Opt in this store to be displayed in the store   locations search?"
    b.
    To remove, click the checkbox next to “Opt in this store to be displayed in the store locations search?” to uncheck the box. 

    Click Save.

    Click Save.