90% Registration

  • Why might a 90% Rule Registered Merchant experience declines of FSA-HRA transactions?

    Registering for the 90% Rule through SIGIS allows a merchant to accept FSA and HRA cards under the IRS guidelines; however, SIGIS cannot guarantee 100% acceptance of cards at these merchant locations. Third-party plan administrators (TPAs) of employer benefit plans have the right to either accept or decline transactions from merchants who self certifiy under the 90% Rule based on the plan rules set up by the TPA and the employer sponsoring the program. The TPA may require auto-substantiated transactions available through SIGIS IIAS Certification. In this case, 90% Rule Registration Merchants may experience declines of card processing by the TPA. If a merchant experiences a high percent of declines from TPA(s), and has a POS system, the merchant may want to consider obtaining SIGIS IIAS Certification. 

    In addition, it is important for a merchant to verify that the information submitted in their 90% registration is correct. If experiencing declines, verify the MC ICA, Visa BIN and MasterCard/Visa Card Acceptor Ids are correct.


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  • How can a 90% Rule Registration or IIAS Certification status be confirmed?

    As a paid Member of SIGIS in good standing, a merchant is able to confirm the status of its SIGIS 90% Registration or IIAS Certification status by visiting the Publications page.

    Please note that the 90% Merchant list is updated each Monday morning and the IIAS Merchant list is published at 5 am PST each business day.


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  • Could a merchant’s acquirer Visa BIN number and acquirer MasterCard ICA be the same number?

    While it is possible that they could be the same number, it is highly unlikely. If you have been provided the same number for both by your acquirer, please contact them and ask them to re-verify the numbers provided.

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  • Could a merchant’s Authorization Card Acceptor ID and Settlement Card Acceptor ID be the same number?

    Yes, it is highly possible that they are the same number. An exception to this would be if the merchant were to use multiple acquirers. SIGIS is capturing only the Authorization Card Acceptor ID.

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  • Does a merchant need to implement an IIAS system based on its merchant category code (MCC)?

    Potentially, yes. The IRS states that cardholders’ use of a FSA/HRA card is limited to merchants and service providers with specific merchant category codes (MCC) related to health care, including physicians, dentists, vision care offices, hospitals, and other medical care providers. The FSA/HRA card can also be used at merchants or service providers that do not have health care related merchant category codes, provided that those non-health care related merchants or service providers use an Inventory Information Approval System (IIAS). It is required that attempts to use FSA/HRA cards at merchants or service providers without a health care related MCC code and who have not implemented an IIAS be declined.

    An IRS ruling highlighted merchants in categories such as supermarkets, grocery stores, discount stores, wholesale clubs, mail order vendors and web-based vendors that sell prescription drugs as examples of merchants that would not be considered health care related and would therefore fall into the class of merchants requiring the implementation of the IIAS system. Because of the broad range of the merchandise sold by many drug stores or pharmacies, the IRS has also specified that drug store and pharmacies are not to be considered medically related, and thus, must implement an IIAS capability. Additionally, drug stores and pharmacies where 90% of their products sold qualify as medically eligible items may qualify for the 90% rule exception.


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  • Does SIGIS support IIAS and 90% Rule processes for US Territories?

    US Territories US Virgin Islands (USVI), Guam, Marianas Islands / Saipan (CNMI) and American Samoa operate under a variety of US tax laws.  Some mirror the US tax law while others are separate and distinct.  In summary:

    • US Virgin Islands (USVI) and Guam operate under a mirrored US tax law that supports Section 125 Cafeteria plans and an IIAS.  SIGIS supports retailers and consumers in these markets via IIAS and 90% Rule programs.
    • Puerto Rico has its own tax code that does not currently recognize Section 125 Cafeteria plans and IIAS.  SIGIS does not support this market.
    • American Samoa and Marianas Islands / Saipan (CNMI) have a combination of US and Local tax laws in effect.  Further research is required to determine if Section 125 applies in these markets and the impact of local tax laws. At this time, SIGIS does not support these markets.

    While SIGIS processes may support these locations members and consumers should consult with their counsel and plan administrators that operate in these markets to determine support for FSA, HRA and HSA debit cards.

    As of April 12th, 2011.


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  • How do FSA/HRA card issuers know which merchants have registered under the 90% Rule with SIGIS?

    SIGIS will publish a list of SIGIS Members that have registered as 90% Rule merchants. Additionally, SIGIS will publish the acquirer IDs and Card Acceptor IDs of these merchants each week. Issuers and issuer processors that elect to participate in the 90% Rule should use the 90% Rule SFTP Report. The issuer processor should use the MasterCard ICA, Visa BIN, Maestro ICA, Visa Interlink ID, STAR ABA, NYCE ID, ACCEL ID, PULSE ID, CAID and MCC code in the authorization process to determine if it is a 90% Rule merchant. Other fields should not be used, as doing so may cause unnecessary declines. The public 90% Rule report should be used as an informational guide when working with merchants. Issuer and issuer processors must be a SIGIS Member to download the list.

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  • How do I add or remove locations to the Store Locator for my 90% Registration?

    1. Click the Login link at the top of the page and enter login information.
    2. Click Access 90% Forms on the right side of the page.
    3. Click on the 90% Registration tab.
    4. Click on the Update link next to your location.
      • To add, click the checkbox next to "Opt-in this store to be displayed in the locations search?"
      • To remove, click the checkbox next to "Opt-in this store to be displayed in the locations search?"
    5. Click Save.

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  • If a merchant can qualify its stores under the 90% Rule, will customers that pay with a FSA/HRA card need to submit sales receipts to their plan administrator?

    Generally, yes. The IRS requires that FSA/HRA purchases be substantiated. As the 90% rule does not provide substantiation, plan administrators will apply their standard substantiation processes to transactions at these locations. The customer may be asked to submit a sales receipt to document that the items being purchased were Rx/prescriptions or Eligible Health Care Products. In some cases the plan administrator may be able to match a transaction amount with other data such as Pharmacy Benefit Management (PBM) co-pay on prescriptions to complete substantiation and not require the customer to submit a sales receipt. But in the absence of an automated matching program like this, it is likely that customers using an FSA/HRA card will be asked by their plan administrator to submit a sales receipt.

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  • If the CAID is different for each terminal in a store, what should a merchant do?

    Some merchants have a unique CAID for each terminal in the store, i.e., CAID 999999001 for the front of the store and 999999002 for the back of the store, that results in more than one CAID value being used in a single 90% location. Because the CAID is used in the authorization approval process for 90% Rule merchants, it is important for merchants to make sure all CAID's from qualifying stores are registered.

    If a merchant’s acquirer / acquirer processor is not able to support a single CAID for all terminals within the same store, the merchant may register each terminal in the 90% registration process. To do so, create a separate store location for each terminal. Except for the Location Name and CAID, all of the other information should be the same for both "locations". Here is an example of what the location Name and CAID fields would look like:

    Location 1 Name                 CAID
    Joe's Pharmacy (Term#1)    999999001

    Location 2 Name                 CAID
    Joe's Pharmacy (Term#2)    999999002

    **Please note that the merchant still must comply with the IRS regulation that the determination of eligible product percentage is at the total store level. If the total store qualifies, you may register all terminals. If the total store does not qualify, a merchant is not allowed to register any terminal for that store. When inputting the percent of gross sales, use the same value for all terminals in that store location.


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  • What are the 90% Rule program requirements?

    Currently, merchants that are registered under the 90% Rule do not need to undertake any technical work. Issuer processors will use the Store ID/Card Acceptor ID field in authorization requests to approve FSA/HRA card transactions at registered stores. Current SIGIS requirements for drug stores and pharmacies who wish to register under the 90% program are:

      • Must become a Member of SIGIS by completing the online Membership Application and paying the appropriate annual membership fee.
      • Completes the SIGIS, online 90% Rule Merchant Registration. During online registration, merchants will be asked to attest that each store registered meets the IRS requirements for the 90% Rule. The following information will also be needed from the merchant’s acquirer in order to successfully complete the form:
          • The acquirer's MasterCard ICA number
          • The acquirer's VISA BIN number
          • The drug store/pharmacy's Card Acceptor ID (each store has a different Card Acceptor ID) submitted in authorization requests. The Card Acceptor ID is sometimes referred to as the store's "merchant number" or "store location id".
          • The MCC code for your store locations. (Note only locations under 5912 and 5122 are eligible).

    Once the application is submitted, SIGIS will send a confirmation to the merchant registrant and its acquirer via email. It is extremely important that merchants double check the information sent in the email. Any errors may result in transaction declines. NOTE: If your Acquirer supports PIN FSA transactions there may be additional Acquirer Ids required based on which PIN network is supported. Contact the SIGIS Help Desk if information on PIN FSA is needed.


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  • What does SIGIS do to verify that 90% or more of the gross sales of a registered store are from Rx/prescriptions or qualified over the counter (OTC) health care products?

    The SIGIS 90% Rule Merchant Program is a self-registration, not certification, program. SIGIS does not investigate or audit the financials of registered 90% Rule stores to qualify stores for registration.

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  • What happens if a merchant changes acquirers?

    If a merchant should change acquirers after registering online with SIGIS, the merchant will need to create a new 90% registration. It is important to note that no changes should be made to the existing registration; doing so can cause transaction declines before the transition is complete.

    The required information includes the acquirer's MasterCard ICA, Visa BIN, Maestro ICA, Interlink ID, STAR ABA, NYCE ID and Card Acceptor ID. Since the SIGIS 90% Rule Merchant information is published to issuer processors each Monday morning, SIGIS recommends that the merchant / acquirer plan the change for a Monday morning with the merchant updating their information in the SIGIS 90% form, the Friday before conversion.

    The original registration should remain in place and unchanged until the acquirer change has been implemented. Once working with the new acquirer the old registration should be deleted.


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  • What if a plan administrator and/or consumers have questions or inquiries about a possible error with the SIGIS 90% Rule merchant information, who will address the questions?

    Consumers contact their plan administrator to ask questions about merchants at which their FSA/HRA card will work. Only plan administrators can answer these questions. Plan administrators should research cardholder questions via their transaction processing systems to determine what may have caused a cardholder's problem. If the plan administrator believes that SIGIS 90% Rule merchant information may not be accurate, they should contact their card issuer processor for assistance.

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  • What if some of a merchant’s stores meet the 90% Rule, but others do not?

    The IRS is clear that only stores whose gross sales are at least 90% from Rx/prescriptions and over-the-counter eligible health care products can be registered as qualifying for the 90% Rule. If a merchant has other stores that do not meet the 90% Rule, the merchant will need to implement IIAS capabilities in order for FSA/HRA card transactions to be approved. Alternatively, it is possible that an assessment of the costs and benefits may suggest that the merchant would just continue to accept payment cards as they do today without an IIAS. If so, it is likely that FSA/HRA card authorizations would not be approved.

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  • What if the pharmacy window in a merchant’s stores would qualify under the 90% Rule, can the merchant register the cash register/POS terminal of the pharmacy area?

    No, that will not be permitted. The IRS requirement is that the gross sales of each store must be qualified as having gross sales that are at least 90% from Rx/prescriptions and over-the-counter Eligible Health Care Items.

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  • What is the 90% Rule Registration?

    Completing the 90% Rule Registration does not make a merchant IIAS-compliant. If a merchant registers to be designated as 90% Rule exempt, the merchant is stating that its store(s) are exempt from the IRS requirement to have IIAS standards in place.

    1. Contact your processor/acquirer (the company that you have engaged to accept credit card payments) to obtain the following for each store location:
      • MasterCard ICA
      • Visa BIN
      • MasterCard/Visa Card Acceptor Ids
      • Merchant Category Code (MCC)
      • Merchant ID
    2. Return to the SIGIS home page at www.sig-is.org and log in to the SIGIS Members Area. Select the Access 90% Forms link on the right side of the page to complete the online registration form. Members are able to enter multiple DBA(s) under one Primary Organization (SIGIS Membership).

    An email will be sent to the merchant to confirm completion of Registration. The merchant’s store(s) will then be listed on the SIGIS website as a 90% Rule merchant which has self registered as complying with the IRS 90% Rule.

    Important Notice: If a merchant does not Register for the 90% Rule Exemption or has not implemented an IIAS standard, the Merchant will find that transactions by customers with FSA/HRA cards are declined by card issuers in compliance with IRS regulations.


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  • What is the Card Acceptor ID (CAID) and what is the length?

    The Card Acceptor ID is typically assigned for each store location and is an alphanumeric value between 1 and 15 digits long and may contain numbers, uppercase letters or a dash, “-“. If a merchant needs assistance determining this number, its acquirer or service provider can provide assistance.


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  • What is the IRS 90% Rule and how does it relate to IIAS requirements?

    In IRS Notice 2007-02 and the subsequent Notice 2008-104, the IRS provides that drug stores/pharmacies (MCC's 5912 and 5122), which have 90% or more of gross sales that are Rx/prescriptions or over-the-counter Eligible Health Care Products, can be viewed as "health care merchants" by plan administrators in the debit card programs. Plan administrators are permitted to approve FSA/HRA card transactions at a drug store/pharmacy that meets the 90% Rule, if the drug store/pharmacy doesn't support an IIAS. The text of the IRS rulings are shown below:

    IRS Notice 2007-2:

    Accordingly, after December 31, 2008, health FSA and HRA debit cards may not be used at stores with the Drug Stores and Pharmacies merchant category code unless (1) the store participates in the inventory information approval system as described in Notice 2006-69, or (2) on a store location by store location basis, 90 percent of the store's gross receipts during the prior taxable year consisted of items which qualify as expenses for medical care under Section 213(d) (including nonprescription medications as described in Rev. Rul. 2003-102, 2003-2 C.B. 559).

    IRS Notice 2008-14- Transition Relief:

    The deadline in Notice 2007-2 is extended by six months so that, after June 30, 2009, health FSA and HRA debit cards may not be used at stores with the Drug Stores and Pharmacies merchant category code unless the requirements of (1) or (2) above are satisfied.


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  • What types of drug stores/pharmacies are likely to meet the 90% Rule requirement?

    As a general answer, it is felt that pharmacies operating in hospitals or medical buildings which mostly fill prescriptions and have a very limited availability of other merchandise would be able to qualify as 90% Rule stores. Additionally, there are specialty pharmacies, such as compounding pharmacies, which primarily sell Rx/prescriptions and may qualify. But in all cases, the drug store or pharmacy must be able to attest that 90% of the previous year's gross sales of the store are from Rx/prescriptions and Eligible Health Care Products.

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  • Will all FSA/HRA plan administrators permit their clients to use FSA/HRA cards at 90% Rule merchants?

    While a majority of plan administrators permit FSA/HRA cards to be used at 90% Rule merchants, there may be some that do not or whose employer clients do not permit it. This could mean that plan administrators in a merchant's market area may have elected not to authorize FSA/HRA card transactions at 90% Rule merchants.

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  • How can a submitted 90% Rule Registration Form be changed or amended?

    If a Member needs to change or correct any information on a 90% Registration Form that has already been submitted, the Member must implement the following steps:

    1. Click the Login link on the top of the page and enter login information.
    2. Click Access 90% Forms on the right side of the page.
    3. Complete or amend desired fields on the form and Submit.

    The Member will receive an email confirmation upon completion and acceptance of the revised form. After the form has been accepted, any DBA updates made will be posted on the 90 % Rule Merchant List located on the SIGIS website.


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