An IRS mandate that became effective July 1, 2009, may impact some Flex Debit Card users. The rule applies to all drug stores and pharmacies.
In order to accept Flex Debit Cards after June 30, 2009, the new rule requires these retailers to install the Inventory Information Approval System (IIAS) or show proof that 90% of the store’s gross receipts during the prior year consisted of prescriptions or qualified over-the-counter health care products.
Many merchants, including large retail chains like Walgreens, Wal-Mart, Sam’s Club, Target, CVS and K-Mart, have already installed the Inventory Information Approval System. This system codes all flex plan eligible expenses allowing automatic substantiation of debit card purchases. Those merchants are not affected by the July 1 deadline. Neither are doctors, dentists or eyewear providers that will still be able to accept the debit card, but where participants may still need to substantiate expenses.
What the rule means is that some drug stores and pharmacies that have been able to accept Flex Debit Cards until June 30 will not be allowed to accept them after that date. Participants shopping at those locations should double check with the retailer to be certain the Flex Debit Card will be accepted after July 1.
If you have questions about your particular situation, please contact Kabel Business Services at (515) 224-9400 or (800) 300-9691.
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