News & Events

New IRS 90% Rule Program

by Liz Norton | Dec 31, 2008

Available Now -- New IRS 90% Rule Program Registration

SIGIS is pleased to announce support for drug stores and pharmacies that meet IRS requirements that on a store location by store location basis, 90% of the store's gross receipts during the prior taxable year consisted of items which qualify as medical expenses (including over-the-counter eligible healthcare items). Effectively now, drug stores and pharmacies that are SIGIS members can register their stores

SIGIS is supporting 90% Rule registration for drug stores and pharmacies that are SIGIS members. To register as a 90% Rule merchant, merchants must first be a SIGIS member in good standing and have paid membership fees. The merchant will then be able to access the Members-Only area of the SIGIS website to complete the 90% Rule registration for each of the merchant's eligible store locations. Note: 90% Rule registration must be on a store-by-store basis. Registration requires that the merchant is able to provide information from data fields in authorization messages. This means that 90% Rule merchants must be in touch with their acquirer, acquirer processor or POS servicer to obtain the correct information to complete the 90% Rule registration. Contact your acquirer or POS servicer before registering your stores. Get a copy below of the SIGIS 90% Rule Procedures Implementation Guide for the information you need to know.

Once a 90% Rule merchant's registration is complete, SIGIS will communicate the Store ID/Card Acceptor ID, of registered store locations, to issuer processor members. Store locations of 90% Rule merchants will also be published by the SIGIS Association for access by Plan Administrators and consumers.

For Plan Administrators, while offering your FSA/HRA cardholders the opportunity to use their cards at registered 90% Rule merchants is optional, it is a great way to increase the convenience and usability of your FSA/HRA cards. The types of drug stores and pharmacies likely to qualify for the 90% Rule are those in hospitals and medical buildings, online pharmacies and specialty pharmacies (such as compounding pharmacies) - all locations where prescriptions are the primary business of the pharmacy. It is noted that transactions at 90% Rule stores are not auto-substantiated and plan administrations will need to follow their policies for substantiation of such purchases, most likely asking cardholders to forward their sales receipts.

The SIGIS 90% Rule Procedures Guide publication is available here and contains information for merchants, acquirers, and issuers about the 90% Rule program.

90% Registration FAQs

Click here to register now.