The IRS enables employers to offer an employee benefits plan with FSA , HRA and HSA accounts. These programs permit funds to be placed in an account that can be used to pay for health care expenses, such as co-pay amounts, prescriptions, and other eligible medical expenses. Additionally, an employer’s benefit plan administrator may offer a debit card to provide convenient access to FSA/HRA/HSA account funds. So, an FSA/HRA/HSA debit card is what is meant by the term health benefit card.While plan administrators determine the requirements for how FSA, HRA and HSA debit cards work, SIGIS offers two services that may be helpful to card holders. These are the Store Locator Service and the Eligible Product List Criteria publication.
The IRS determines what health care services and products are eligible for card holders to purchase with an FSA or HRA card. To help all SIGIS participants, SIGIS determines whether a product qualifies or does not qualify as a medical expense under IRS Code Section 213(d) and applicable IRS guidance.
Card holders may access and download a document that describes the criteria for an eligible product. This document explains health care items that are considered eligible or ineligible for purchases by FSA and HRA card holders. Health care items that are not eligible for purchase include both those that are dual-purpose or ineligible:
Over-the-counter products that treat a specific medical condition and are primarily for a medical purpose. They include medicines or products that diagnose, alleviate or treat existing or imminent injuries, illnesses or medical conditions. These drugs and products are not cosmetic in nature, or merely beneficial to general health or used for personal hygiene. As a general rule, most of these products are of short-term use, but some do treat chronic medical conditions.
These products may have both a medical purpose and a personal hygiene, cosmetic or general health purpose. In order to be considered eligible, they must be used to treat a medical condition and not used to improve or maintain general health unless prescribed by a physician to treat a specific illness, condition or injury. These products may be eligible for reimbursement, but require a letter of medical necessity from a licensed health care professional stating the specific diagnosis or medical condition, the specific over-the-counter medicine recommendation to treat the condition, and documentation of the product and cost. Dual-purpose items will not be included in the SIGIS List, but may be submitted to a plan administrator with the required documentation as noted above. Card holders should contact their plan administrator for more information and the documentation required.
Products that are used for general health, cosmetic, or personal hygiene purposes are not reimbursable. Typically, these are not referred to as medicines or drugs and are not recognized to treat a medical condition. Medical expenses that are not reimbursable under IRS Code Section 213(d) of the federal tax code are ineligible. These include food supplements, toiletries, lotions and soaps, shampoos, and most herbal supplements. These items are also not on the SIGIS List.Click here for the Eligible Product List Criteria publication.
On June 11, 2018, Outside Counsel for SIGIS sent a letter to the IRS requesting clarification on certain items that the SIGIS Eligible Product List Committee has under review to determine their eligibility. SIGIS requested that the IRS formalize prior informal comments, review certain categories based on new information and review potential new categories. SIGIS requested clarification for 16 specific categories of items including:
· Insect Repellant
· Compression Hose
· Inversion Tables
· Prenatal Vitamins
· Sports Physicals
· Diagnostic devices to test for oxygen in the blood
· Diagnostic devices to test for alcohol
· Drug testing kits
· Genetic test kits and expenses
· Downloadable apps with medical functions
· Nasal Strips
· Supplements without non-medical purposes
· Supplements provided in a form not conductive for use for non-medical purposes
· Ace Bandage / Athletic Tape / Brace / Elastic Bandage / Hot-Cold Therapy / Orthopedic Supports / Brace / Rib Belts / Back Braces
· Mobility aids and modifications attributable to ageing or limitations to activities of daily living such as shower grab bar, elevated toilet, walk in tub
Read the full letter here.
We are hopeful the IRS will respond to our request and provide additional information to SIGIS Member Companies and Consumers with Health Benefit Accounts.
SIGIS was organized to develop an industry based solution to IRS guidelines for the acceptance of FSA, HRA and HSA spending account cards. SIGIS develops standards and provide member education; this includes an IIAS Certification program and 90% Registration to assist our members. SIGIS member companies include merchants, acquirers, pos providers, card networks, card issuers, third party administrator members and others. SIGIS membership includes over 14,000 companies.
This material is designed and intended for general informational purposes only and is not intended to address the circumstances of any particular individual or entity. This material is not intended, nor should it be construed or relied upon, as legal advice. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.