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  • Does SIGIS assist members in determining which items are Section 213(d) eligible medical expenses?

    Yes. SIGIS publishes an Eligible Product List for participating merchants to use as the basis to identify items in their inventory. Access to the Eligible Product List is available upon SIGIS membership approval. The Eligible Product List also enables plan administrators and third-party plan administrators (TPAs) to rely upon a more consistent identification of eligible medical items.

  • Has the IRS approved the SIGIS approach?

    Although there is not currently a mechanism for formal IRS approval, SIGIS and its Members have met with IRS and Treasury representatives to review the SIGIS approach. In addition, SIGIS meets with the IRS when guidance is required on existing or new regulatory requirements.

  • What is an “inventory information approval system” as specified by the IRS?

    An IIAS requires a merchant’s point-of-sale system 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 list is limited to eligible medical expenses as described in Section 213(d) of the Internal Revenue Code, including eligible non-prescription items. The merchant’s system totals the eligible medical expenses and transmits this information 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.

  • What is the Special Interest Group for IIAS Standards?

    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.