Learn the IIAS Requirements for FSAs and HRAs

An IIAS, or Inventory Information Approval System, is a feature of a point of sale system that identifies eligible purchases for HRA and FSA plans. The IRS requires non-healthcare merchants, such as supermarkets and drug stores, to use an IIAS in order to auto-substantiate FSA and HRA cards at the point of sale. Other health-related merchants may use one as well.

When an employee goes to the store to pick up a prescription (or to any non-medical retailer to pick up a qualified health item), they will only be able to complete the purchase using their Visa® FSA or HRA card if the store has installed an IIAS in their point of sale system. The IRS adopted this requirement in 2006, so most retailers will likely have this installed. The rule virtually eliminates accidental non-qualified purchases and helps reduce benefit administration paperwork.

How it works

An IIAS segments products at checkout and communicates with card issuers for approval. Learn more

An IIAS segments products at checkout and communicates with card issuers for approval. When a customer pays with an FSA or HRA card, the merchant’s POS system compares products being purchased with eligible healthcare products that the merchant has flagged. These flags can be created using inventory control information like brand, UPC or SKU number.

Once the merchant’s POS system identifies the eligible healthcare products, it totals the amount attributable to such products and inserts the Qualified Healthcare Amount in a designated field in the authorization request message, along with other required data fields. This information is then passed to the card issuer for approval. Hide

Where Visa FSA and HRA cards can be used

Visa FSA and HRA cards can be used at a variety of locations that accept Visa Debit Cards Learn more

Visa FSA and HRA cards can be used at a variety of locations that accept Visa Debit Cards. These include:

  • Merchants with a Healthcare Merchant Category Code (MCC), such as doctors, dentists or hospitals
  • SIGIS-approved non-healthcare merchants that have implemented an IIAS, such as most drug stores and supermarkets
  • IIAS non-healthcare merchants that have implemented their own proprietary IIAS solutions

For a full list of SIGIS certified merchants, visit the SIGIS website Hide

IIAS for cardholders

Here’s what you need to know to ensure your employees have a smooth experience with their Visa FSA or HRA card. Learn more

Here’s what you need to know to ensure your employees have a smooth experience with their Visa FSA or HRA card. By clearly communicating these key features and benefits, you can help your employees use their cards with confidence.

  • Less need to send in receipts. IIAS requirements facilitate auto-substantiation at the point of sale and reduce the number of times cardholders have to send in sales receipts after using their Visa FSA and HRA cards.
  • More places to use the cards. Cardholders can use their Visa FSA or HRA cards to purchase eligible healthcare products at non-healthcare merchants with IIAS in place.
  • Common reasons cards are declined. Visa FSA and HRA cards may be declined for a number of reasons. Typically, because the card’s not activated, there’s an insufficient card balance, cardholder made an ineligible purchase or the card was used at a non-IIAS/SIGIS-certified merchant location

Here’s where to go for more information on a specific reason for a Visa FSA or HRA card decline:

  • Merchants – contact your acquirer
  • Benefit Administrators – contact your processor
  • Employers – contact your benefit administrator
  • Cardholders – contact your benefit administrator or follow the instructions on the back of your card Hide

Employer/Administrator benefits

IIAS arrangements reduce costs for employers and benefit plan administrators. Learn more

IIAS arrangements reduce costs for employers and benefit plan administrators. These include decreases in paperwork and other staff expenses, as well as increased employee satisfaction and participation in HRA and FSA programs. Hide

Special Interest Group for IIAS Standards

SIGIS – or the Special Interest Group for IIAS Standards – was founded by a group of companies that support FSA and HRA debit card transactions. Learn more

SIGIS – or the Special Interest Group for IIAS Standards – was founded by a group of companies that support FSA and HRA debit card transactions. These companies range from retailers, card issuers, third-party plan administrators, merchant acquirers and processors to financial institutions, trade association groups, software vendors and payment card networks. Their common goal is to establish a voluntary industry standard intended to meet IRS requirements for operating an IIAS.

Visa is a founding member of SIGIS and helped lead the effort to develop the industry standards for IIAS.

FSA-friendly systems

The IRS IIAS ruling provides that in order for an FSA or HRA payment card to be used, non-medical merchants must verify – in real time – that purchases made with an the card are restricted to eligible healthcare (213(d)) products only. Additionally, retailers that implement an IIAS and begin to identify eligible healthcare items on all sales receipts will be more FSA-friendly for all customers. Implementing an IRS-compliant IIAS through SIGIS allows for uniformity in the list of eligible healthcare products and SIGIS quality control through oversight and merchant certification. Hide

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