As of July 1, 2009, in accordance with IRS regulations, health FSA and HRA debit card use will be limited to drugstores and pharmacies that have an inventory information approval system (IIAS) or meet the 90% rule.

HOW DOES THIS AFFECT YOU AS AN EMPLOYER?

The following is a breakdown of the new guidelines effective July 1, 2009:

IIAS Merchant
If the drugstore or pharmacy is an IIAS merchant, the system will automatically identify the eligible medical care items when you checkout (if you are covered by your employer’s coverage). One can just swipe and go with no issues. However, please remember to save receipts every time you use your card as this is required by the IRS.

90% Merchant Rule
If the drugstore or pharmacy is a 90% Rule Merchant, you can still use your card to pay for eligible prescriptions and medical care items. However, you will be required to submit receipts for the items purchased with your card.

(*90% merchants need to qualify each year for this status or else the card will not work.)

Non-IIAS/Non-90% Rule Merchant
If the drugstore or pharmacy is not an IIAS or 90% Rule merchant, your card will no longer work. Therefore, you will need to use another form of payment for your eligible prescriptions and medical care items and then submit a claim for reimbursement.

WHAT SHOULD I DO NEXT?
Please communicate this important information to your enrolled employees. For a list of IIAS Merchants CLICK HERE and for a list of 90% Rule Merchants CLICK HERE.

If you have any additional questions regarding the information within this eCommunication, please call Corporate Synergies at 1.866.CSG.1719 or click here to contact us today.

This alert is a legislative update designed to help you administer your employee benefits program and is not legal counsel. Please consult with an attorney for legal advice.