Flexible Spending Accounts or simply FSA were designed to help consumers to control their health care expenses. A huge amount of customer and pharmacists have found those cards were confusing and their usage very complicated. When FSA was initiated, restrictions were put in place, so those accounts could be used only for pharmaceutical and medical items and services only. While the restrictions were in place, there weren’t any systems to enforce them. Internal Revenue Service of the U.S. put in place restrictions for where FSA cards could be used and accepted. If the pharmacist finds his customers with FSA cards having trouble with purchasing medications in the pharmacy, he should quickly resolve the issue by taking several important steps.
Check, if FSA cards can be accepted
The amount of FSA cards pharmacist can see in the pharmacy depends on how many companies or businesses in the area provide them to their employees. When IRS made guideline effecting FSA accounts, they made pharmacy specialists responsible for making sure all the customer’s purchases made with FSA cards to be health care expenses. Pharmacists are required to use Inventory Information Approval System (IIAS) points in their pharmacies to separate health care items in their pharmacy from any other items. It’s possible to use FSA card in the pharmacy only if 90% of all the pharmacy overall sales are FSA eligible items or prescriptions.
Reasons for decline
As with regular credit or debit cards, there are several reasons for FSA cards decline in pharmacies. The main reason is IRS guideline, so if pharmacist hasn’t done anything yet – every card will be declined, even if the item is RSA eligible. As FSA plan administrators authorizing transactions only from approved points, even pharmacies with 90% exemption can have some declines. Another reason for the decline is the insufficient amount on customer’s account. This is one of the several reasons left if pharmacy uses the approved point of sale.
Accepting FSA cards
If pharmacy wishes to accept FSA cards, it should be eligible for 90% exemption and use the approved point of sale system. In order to use the approved point of sale, the pharmacy should become the member of SIGIS. It’s the trade organizations that has been formed to help pharmacies to meet IRS requirements
SIGIS will certify the point of sale system, which can handle FSA cards, will show what items are not eligible to purchase with FSA card. On the top of that, SIGIS publishes product list and the list of in-network providers eligible for FSA.
The simple list will be the great help for pharmacies, which are going to accepts FSA cards. All the pharmacist needs to know is on the list, so the whole process will not be that confusing and complicated, as it seemed to form the beginning.
- Become a member of Special Interest Group for IIAS Standards (SIGIS). It will help the pharmacist to get a list of product, eligible to be purchased with FSA card and put the pharmacy on the list of in-network providers, where the card can be used.
- Pharmacy needs to choose, either opt for 90% exemption or simply use an approved point of sale system. In this case, it’s important to remember, that 90% exemption is not that reliable and some FSA cards could be declined.
- Fill out the proper Special Interest Group for IIAS Standards (SIGIS) form. There are two forms available, so the pharmacist should choose the one that fits the best. The decision should be based on the previous step choice.
- After the pharmacy is successfully certified, Special Interest Group for IIAS Standards (SIGIS) will inform financial and payment cards companies (MC, Visa) and various FSA plan administrators. It’s not an instant process, so it will take up to three weeks before the pharmacy will appear in the lists of all the companies, mentioned above.
The FSA cards usage is dramatically increasing now. More different kinds of employers are offering FSA accounts to their employees as the benefit. And the importance of the ability to handle those FSA cards is only increasing with time, so all the pharmacies, which have not got their certifications and approved point of sale points should hurry up and make everything possible in order to be eligible to accept the cards.