New Debit Card Regulation Deadline Extended for Flexible Spending Accounts

Dec 15, 2008 | Flexible Spending Accounts, Insurance News, Uncategorized | 0 comments

On January 1, 2008, the IRS introduced new regulations for debit cards specifically used to reimburse eligible healthcare expenses for Flexible Spending Accounts (FSAs). The Internal Revenue Service mandated that Flexible Spending Account (FSA) debit cards may not be used at stores such as grocery stores, wholesale clubs, supermarkets, discount stores, etc unless those merchants have complied with and participate in the Inventory Information Approval System(IIAS). The IIAS system automatically flags eligible healthcare items and allows those transactions to be automatically approved.

The IRS previously mandated that stores classified as drug stores and pharmacies would also be required to follow the IIAS standards starting January 1, 2009. The IRS recently extended the deadline for pharmacies and drug stores to July 1, 2009. Starting July 1st, debit card swipes at non-participating drug stores and pharmacies will be denied. Participants can use another form of payment and submit a claim form with supporting documentation for reimbursement. We encourage participants to check and see if the stores they use are compliant with IIAS. To find a listing of approved merchants please visit www.sig-is.com.

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