FSA Benefit Card transactions

• Over-the-Counter Rules Changed on January 1, 2011

The Health Care Reform act that became law in March 2010 will affect many aspects of health care coverage. This includes certain changes to Flexible Spending Accounts (FSAs).*

Prescriptions are now required for many over-the-counter items.

Effective January 1, 2011, a doctor’s prescription will be required in order to use your FSA funds for many over-the-counter (OTC) items. Also, if your FSA plan includes a MasterCard health care benefit card (“flex card”), certain OTC items can no longer be purchased using the card.**

Starting January 1, 2011, FSA participants will need to pay for many over-the-counter item(s) using a check, cash, credit card, etc., and then file a reimbursement claim. To be considered for reimbursement, claims for OTC products must include a written prescription from a licensed medical practitioner prescribing the item to treat a specific medical condition.

The new rules affect all FSA plans on January 1, 2011, regardless of the plan’s renewal date.

Prescription and Manual Reimbursement Required for These Items – Effective January 1, 2011, the following categories of items will require a doctor's prescription to be eligible for reimbursement. After January 1, 2011, these items can no longer be purchased using a health care benefit card.

• Acid Controllers
• Allergy and Sinus
• Antibiotic Products
• Anti-Diarrheals
• Anti-Gas
• Anti-Itch and Insect Bite
• Anti-parasitic Treatments
• Baby Rash Ointments/Creams
• Cold Sore Remedies
• Cough, Cold and Flu
• Digestive Aids
• Feminine Anti-Fungal/Anti-Itch
• Hemorrhoidal Preps
• Laxatives
• Motion Sickness
• Pain Relief
• Respiratory Treatments
• Sleep Aids and Sedatives
• Stomach Remedies
• (This list is subject to change as new goverment guidelines become available.)

Prescription Not Required for These Items – The following are examples of some of the OTC items that will remain available without a prescription. They can be purchased using a health care benefit card.

• Band Aids
• Birth Control
• Braces and Supports
• Catheters
• Contact Lens Supplies & Solutions
• Denture Adhesives
• Diagnostic Tests and Monitors
• Elastic Bandages and Wraps
• First Aid Supplies
• Insulin and Diabetic Supplies
• Ostomy Products
• Reading Glasses
• Wheelchairs, Walkers, Canes
• (This list is subject to change as new goverment guidelines become available.)

Savers can’t control the new federal laws that make these changes necessary, but we understand that the new requirements can create an additional burden on many FSA participants. To help ease that burden Savers will continue to provide daily claims processing to ensure that your reimbursement funds arrive quickly and efficiently.

*These new rules apply to all tax-advantaged health care accounts, including Flexible Spending Accounts (FSAs), Health Savings Accounts (HSAs), Health Reimbursement Arrangements (HRAs) and Archer Medical Savings Accounts (Archer MSAs).

**Some pharmacies may be able to process OTC items with a prescription through their pharmacy system. If so, and the OTC item is assigned a prescription number by the pharmacist, it may be possible to use your benefit card. This will vary by pharmacy, so please check with your pharmacist to see if they are equipped to process OTC items as prescriptions.

• Most FSA Benefit Card Transactions Are Automatically Approved

In January 2008, a nationwide inventory information approval system (IIAS) for pharmacies, retail and grocery stores went into effect in response to new IRS regulations. Under the IIAS system, when you swipe your benefit card to purchase a prescription or eligible over-the-counter product from a participating pharmacy, retail or grocery store your transaction is automatically approved at the cash register; you don't have to submit a copy of your receipt to Savers for that purchase.

However, here's an important point to remember: The deadline for merchnats to adopt the IIAS standards was July 1, 2009. Most major pharmacies, and retail and grocery stores have adopted the new IIAS system; however, some merchants may have decided not to participate, or they many have yet to install an IIAS system in their store.

Under the new IRS rules, non-participating merchants won't be allowed to accept FSA benefit cards until they have an IIAS system in place. (Some specialty drug stores and pharmacies may be able to apply for an exception, but the merchant must meet strict requirements to do so.)

Doctor's offices aren't required to participate in the IIAS system. However, provided that Savers has received a list of your group insurance copay amounts from your employer, when you pay your doctor's office copays with your benefit card those transactions will be automatically approved.

• For Some Transactions a Receipt Will Be Needed

Dentists, orthodontists, and vision care providers aren't required to participate in the IIAS system described above. And, since copays often don't apply for these providers, you should expect to receive an e-mail or letter asking you to submit a copy of your receipt to Savers when you swipe your benefit card to pay for dental and vision care services.

If your insurance plan doesn't include copay amounts at the doctor's office, you may also be asked to submit a receipt for thos charges. This is so Savers can manually review each transaction to verify that the purchase was for an eligible product or service. This review process is required in order to ensure that your employer's FSA Plan remains in compliance with IRS regulations.

Please keep all your receipts for at least 10 days just in case you receive a request to submit a copy for review.

• Some Pharmacy and Drug Store Transactions May Be Denied

Savers has put into place the latest technology to support the new IIAS standards set forth by the IRS, and we regularly update our processes to support any updates or changes to those standards.

If you've had an FSA transaction denied at a drug store or pharmacy since July 1, 2009, and your FSA account is in good standing, there's a good chance the merchant isn't participating in the IIAS point-of-sale approval system described above, and this has resulted in the transaction being denied by the benefit card system.

Please understand that all drug stores and pharmacies must implement the new IIAS standards. Should they fail to do so, they will be unable to accept benefit cards per IRS guidelines. (Some specialty drug stores and pharmacies may be able to apply for an exception, but the merchant must meet strict requirements to do so.)

You may wish to ask the pharmacist or store manager if they have implemented the new IIAS point-of-sale system for FSA accounts. If they have and your FSA eligible transactions are still being denied, you can help by letting them know that there appears to be a problem with their system and asking them to contact the financial institution that processes their credit card transactions for assistance. The IIAS point-of-sale system is administered by the Special Interest Group for IIAS Standards (SIGIS). Visit the SIGIS web site store locator for a list of participating merchants.

If your FSA benefit card transaction failed and you subsequently paid for an eligible item (such as a prescription or eligible over-the-counter product) using cash, check, credit card, etc., please submit to Savers a copy of your receipt along with a manual claim form and we will gladly process the transaction for reimbursement from your FSA account. You may download a claim form from our Forms page.

As with any credit card transaction, sometimes a benefit card transaction will fail for one reason or another. Should this happens, account holders who have provided Savers with an email address will receive an email with a card transaction denial code explaining why the transaction failed.

For more information, please contact Savers Administrative Services at:
(336)759-3888
(800)949-0311
flex@saversadmin.com