The retailer’s point of sale system identifies eligible healthcare FSA/HRA purchases by comparing the inventory control information (e.g., UPC or SKU number) for the items being purchased, against a pre-established list of eligible medical expenses. The list is restricted to “eligible medical expenses” as described in Section 213(d) of the Internal Revenue Code (including eligible non-prescription items). The eligible medical expenses are totaled and sent to the payment card issuer’s system which approves the payment subject to coverage under the health plan (i.e., type of coverage provided, covered participant, etc). The IRS requires an IIAS for card transactions to be accepted at non-healthcare merchants. IIAS transactions are considered fully substantiated.
To view a listing of retail merchants that have implemented an IRS-approved inventory information approval system, please click on the following link and then click on “IIAS Merchants” under “The Store Locater”. SIGIS