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IRS FSA Debit Card Deadline Extended [12/08/08]
Special POS Breaking News Edition December 2008

Breaking News!

IRS Requirements for FSA Debit Cards Deadline Extended!

The IRS has announced a six month delay to its requirement that all Drug Stores and Pharmacies have an IIAS-compliant POS system installed by year-end in order to continue accepting FSA debit cards after January 1, 2009. Drug Stores and Pharmacies now have an additional six months to implement one of the following two options to meet these requirements: (1) install an IIAS compliant POS system, or (2) apply for the 90% Rule Program. The new IRS deadline for this requirement is now June 30, 2009.

The good news is that you now have an additional six months to meet these requirements. The bad news is that this is still only a delay, and these requirements must still be met. Given the growing backlogs at SIGIS, credit card processors and POS system vendors, we strongly recommend that you remain diligent in your efforts to satisfy these requirements promptly.

Please coordinate through your OPUS-ISM sales or support representative with any questions on this announcement and what it means for you.

IIAS Compliant Frequently Asked Questions

Below are some frequently asked questions on OPUS-ISM’s IIAS-Compliant POS systems:

Q. Where can I find the latest information on the 90% Rule Program?

A: Details about the 90% Rule Program and application can be found at http://www.sig-is.org/en/index.asp. The 90% Rule Program is an available option if 90% or more of a pharmacy’s gross receipts consist of qualified medical expense items. Pharmacies interested in using this exemption will need to certify that 90% or more of the store’s gross receipts during the prior taxable year consisted of items which qualify as expenses for medical care. However, as we have written in prior newsletters on this subject, pharmacies using the 90% exemption may still lose customers due to the burden placed on FSA/HRA plan administrators by their members purchasing medical items at pharmacies not using IIAS-compliant POS systems.

Q. How do I meet these requirements with my OPUS-ISM POS system?

A: In order to accept FSA and HSA cards on June 30, 2009 using your OpusRx and InteRx POS systems, you will need to complete the following four items:

1. You will need to have your POS system updated to run a new version of the OpusRx or InteRx POS software. We will be releasing this software upgrade shortly in order to allow time to have it installed and tested prior to the new deadline. When signing up for this program, you will need to schedule a time for OPUS-ISM to remotely install, configure and test the POS software enhancements at your pharmacy. There will be no additional charge by OPUS-ISM for this upgrade.

2. You will need to become a member of SIGIS (Special Interest Group for IIAS Standards) in order to gain access to SIGIS’ Eligible Product List, a data base used by retailer members as the basis to identify items in their inventory eligible for payment through FSA/HRA accounts. Access to the Eligible Product List is available through a SIGIS Tier 4 membership costing $250 annually. To become a member, SIGIS currently requires applicants to complete the on-line membership enrollment form located on the SIGIS website http://sig-is.org/imwp/web3/forms/sigis/memberapp.aspx. OPUS-ISM is in discussions with SIGIS to receive permission to enroll our customers that are our partner X-Charge for credit card processing through a short form process, but we have not yet received approval from SIGIS. We will be sending out a notification when we receive permission from SIGIS to register our customers through the short form process.

3. You will need to switch to a credit card processor which is integrated with OpusRx or InteRx for this IIAS compliant solution. Currently, the only credit card processor that is part of our IIAS-compliant POS solution is X-Charge. As a result, you will need to switch from your current processor to X-Charge in order to have your OPUS-ISM POS system meet the IRS requirements. As part of our partnership, X-Charge has committed to provide and install its X-Charge software at no charge to OPUS-ISM customers contracting with X-Charge for credit/debit card transaction processing. In the event that you currently process through another credit card processor, we believe that you will find X-Charge’s rates very competitive. X-Charge claims that in 90% or more of the situations, they can meet or beat your current processor’s rate. X-Charge will be managing the installation and configuration of its free software and of its transaction processing service. Please coordinate through your OPUS-ISM sales representative for an introduction to X-Charge or visit the OPUS-ISM X-Charge website (www.opusismx.com).

4. You will need to confirm that you have all necessary hardware. This solution requires a Windows-based POS register, a SigPad to swipe cards and to obtain credit card signatures, and an internet connection. Both the OpusRx On Track POS and InterPOS software allow for both SigPad integration and non-SigPad integration configurations, although we recommend the SigPad integration. If you are missing any of these items, additional hardware and/or software purchases may be required.