An inventory information approval system (IIAS) requires a merchant’s inventory and point-of-sale systems to have the ability to verify that the merchandise being purchased with a FSA/HRA card is an eligible medical expense, as defined by the IRS. The merchant’s system compares the inventory control information (e.g., UPC or SKU number) of items being purchased against a pre-established list of eligible medical products, the SIGIS Eligible Product List.
The merchant’s system, then, totals the eligible medical expenses and transmits this information to its acquirer who forwards the authorization request to the payment card issuer for approval, subject to coverage under the health plan (i.e., type of coverage provided, covered participant, etc.). Thus when a merchant supports an IIAS, consumers are not able to use FSA/HRA card funds to purchase merchandise unless the items qualify as eligible medical expenses.
SIGIS IIAS Merchant Certification Program
Merchants that elect to implement an IIAS using the standard published by SIGIS must become Members of SIGIS and be certified by SIGIS prior to sending IIAS transactions in the SIGIS-standard format.
Certification requires completion of an IIAS Merchant Self Assessment, a technical testing certification by the merchant’s acquirer, use of the SIGIS Eligible Product List, and arrangements to support transaction data retention/retrieval. A merchant's acquirer will review the IIAS Merchant Self Assessment and submit it to SIGIS for approval. A merchant will not be permitted to claim that it supports IIAS transactions using the SIGIS standard until it has been certified to the IIAS standards developed and approved by SIGIS.
Merchants that are clients of a certified third-party service provider may use a simplified certification form, see TPS Merchant Certification.
To obtain a copy of the SIGIS IIAS Technical Specification, SIGIS Members may login to the Members Area and download a copy.
Types of Merchants that Support an IIAS
The IRS requires merchants that sell qualified medical goods and services, but do not have a health care Merchant Category Code (MCC) or do not qualify under the IRS 90% Rule exemption, to have an IIAS for purchases with FSA/HRA cards to be approved. The following list of MCC's, which is not intended to be all inclusive, is an example of the Merchant Category Codes that are required to implement an IIAS.
NOTE: SIGIS services do not support dependent care FSA accounts or health care providers such as doctor's offices, hospitals, chiropractors, massage therapists, dentists, medical labs or vision centers.
| Merchant Category
|| Merchant Category Code
| Discount Stores
| Warehouse Clubs
| Convenience Stores
| Online Pharmacies
|| 5960, 5964, 5965, 5969
| Drug Stores/Pharmacies*
| Druggist/Druggist Proprietaries*
| Other Non-Healthcare Merchants
| *May be eligible for 90% Rule registration if stores qualify under IRS requirements.