HSA and FSA Cards Acceptance

Owned by Ariana R. (Deactivated)
Last updated: Oct 13, 2021 by Rebecca Buesseler (Deactivated)
6 min read

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Eligible MCC Code

In order to accept HSA or FSA cards for transactions, merchants must have an eligible MCC code or 90% registration. 

An HSA/FSA card’s particular plan will define a list of eligible Merchant Category Codes (assigned to your business account, set by the card associations). These merchant categories are defined as health care providers because the services they offer are strictly health care related. MCC examples are below:

  • 5975 – Hearing Aids-Sales, Service, Supply Stores

  • 4119 – Ambulance Services (Dependent on Plan Administrator)

  • 5976 – Orthopedic Goods-Artificial Limb Stores

  • 7277 – Debt, Marriage, Personal-Counseling Service (Dependent on Plan Administrator)

  • 8011 – Doctors-not elsewhere classified

  • 8021 – Dentists, Orthodontists

  • 8031 – Osteopathic Physicians

  • 8041 – Chiropractors

  • 8042 – Optometrists, Ophthalmologists

  • 8043 – Opticians, Optical Goods, and Eyeglasses

  • 8049 – Chiropodists, Podiatrists

  • 8050 – Nursing and Personal Care Facilities

  • 8062 – Hospitals

  • 8071 – Dental and Medical Laboratories

  • 8099 – Health Practitioners, Medical Services-not elsewhere classified

SIGIS Registration

90% Registration

This registration must be completed with SIGIS Organization. The program is limited to drug stores or pharmacies (MCC 5912, 5122) that have stores whose gross sales are at least 90% from prescriptions and over the counter (OTC) eligible healthcare products. If you are interested in participating in the 90% Program, you will need to work with the SIGIS Organization directly for the registration process.

Direct merchants to get more information at https://www.sig-is.org or have them contact merchants directly.

How Is a Change Made to the 90% Merchant Form?

  1.  Select the Member Area tab on the SIGIS website (http://www.sig-is.org/) and enter Member Area login: Click on the 90% Rule Merchant Form

  2. Complete or amend desired fields on the form and click submit.  Please note: The check box “Show Merchant and Acquirer Details” must be checked in order to display the acquirer information.

  3. A confirmation email will be sent upon completion and acceptance of the revised form.

  4. Once the form has been entered and received, the updates will be posted on the 90% rule Merchant list located on http://www.sig-is.org/ by the end of that business day.

  5. The new Transactional data will be available to Acquirer/Processors and Issuer/Processors the following Monday morning.

What is the 90% rule? 

IRS included a provision commonly referred to in the industry as the “90% Rule”.   The goal is that SIGIS member store locations that are registered under the 90% Rule will not need to undertake any technical work to meet the June 30, 2009 deadline. 

What are the 90% Rule program requirements?  
Current SIGIS requirements for drug stores and pharmacies who wish to register under the 90% program are:

  1. Become a member of SIGIS by completing the online membership application and paying the appropriate membership fee.

  2. Complete 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.

  3. Acquirer's MasterCard ICA number

  4. Acquirer's VISA BIN number

  5. 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".)

  6. Once the application is submitted, SIGIS will either approve it or request additional information.

  7. SIGIS will communicate with you and your acquirer via email.

What is an Acquirer's MasterCard ICA number? It is a 6 digit number assigned by MasterCard to each Acquirer. If you have different Acquirers for Authorization vs. Settlement you will have a separate ICA for each one. SIGIS is only collecting the Authorization Acquirers ICA at this time.

What is the Card Acceptor ID and what is the length? It is the 12 digit MID and the first three of the store. Field 42 of the ISO 8583.

 

Inventory Information Approval System (IIAS)

The IIAS is an inventory system that sorts a customer’s basket at the POS into items eligible for HSA/FSA and items that are not. At any non-medical retailer (or one without an eligible MCC defined by the cardholder’s plan), IIAS compliance is required to accept HSA/FSA. IIAS applies to all mass, discount, grocery, chain drug, mail order and some pharmacy merchants. The IRS adopted this requirement in 2006.

HSA/FSA cards are prepaid debit cards (Visa and MasterCard) that can be accepted as Signature Debit or PIN Debit. The cards have no extra level of data associated with them, but they are associated as HSA/FSA to the networks.

What is IIAS Certification? 

In accordance to IRS requirements, Merchants that wish to accept FSA/HRA cards must demonstrate that their Point of Sale terminal can identify eligible products that may be purchased with the health related card accounts.

To assist you in determining which SIGIS IIAS Certification is right:

  1. Contact your POS provider to determine if they are certified with the SIGIS Group as a Certified Third Party Service (TPS)

  2. If your POS provider is a Certified Third Party Service (TPS) provider, they will instruct you to complete the online TPS Client Merchant Certification Self-Assessment form. 

  3. If your POS provider is not a Certified TPS provider complete a Merchant Self-Assessment Form which can be accessed viawww.sig-is.org\

  4. Acquirer complete the Self-Assessment form and return to eitherCertification@sig-is.orgor fax to 925-886-3611

  5. An email will be sent upon completion of Certification.

  6. The acquirer submits a request to Visa and MasterCard for the MVV and MAID

    1. VISA: email toiias-auto-sub@visa.comand include

      1. Copy of the “merchant certified” email from SIGIS

      2. Subject Line: insert the Name of Merchant and the words New MVV Request

      3. Attach a copy of the MVV Request MVV Excel file completed with all of the required information for the merchant: legal name, DBA name(s), address of merchant, acquirer BIN, MCC and acquirer name

    2. MASTERCARD:  email toSIGIS_Merchant_Setup@mastercard.comand include

      1. Merchant Name

      2. Merchant Address

      3. Merchant contact Person

      4. Merchant contact phone number

  7. The acquirer will board the MVV / MAID into MMS Request Screen or Express.

    1. New terminal file in MMS is input on Request Screen

    2. Existing file in MMS is on the store descriptor field

What is an Acquirer's MasterCard ICA number? It is a 6 digit number assigned by MasterCard to each Acquirer. If you have different Acquirers for Authorization vs. Settlement you will have a separate ICA for each one. SIGIS is only collecting the Authorization Acquirers ICA at this time.

What is the Card Acceptor ID and what is the length? It is the 12 digit MID and the first three of the store. Field 42 of the ISO 8583.

HSA/ FSA Card Declines

90% Exception Registered Merchant Declines

If a merchant is registered under 90% exception, and cards are still declining the issue may be one of the following:

  • Just because the merchant has registered as 90%, this does not mean all Third Party Administrators (TPA) will honor the transaction. 

  • There could be an information error on the merchants on-line form. The most common errors are:

    • Missing Values - The MCC, BIN, ICA and CAID fields must have a non zero value. E.g. 0 or 0000 is not a valid value.

    • MCC Values - If you have registered with a value other than 5122 or 5912 then update the 90% Rule Self-Registration form with the correct code

    • BIN and ICA Values - While it is possible to have the same value for the Acquirer BIN and Acquirer ICA, it is highly unlikely.

    • CAID Values (Card Acceptor ID) - A CAID value is unique for each store location - It is the 12 digit MID and the first three of the store. Field 42 of the ISO 8583. 

    • Authorization ICA and Authorization BIN - The authorization ICA or BIN is up to a 6 digit number but you have been provided a 4 digit number.  The ICA / BIN must be entered with leading zeros. Please do not add the zero’s at the end.

      • Example: 1234

      • Entered Correctly: 001234

      • Entered Incorrectly: 123400

IIAS Declines

Decline Reasons

Merchant Profile Issues

  • (TSYS Specific) Merchant is boarded incorrectly in Express.

    • For SIGIS the TSYS profile requires the MCFS number to match the MID on the SIGIS website that the merchant has entered.

    • For IIAS the TSYS profile required the VISA MVV and the MasterCard MAID.

  • The SIGIS merchant has not used the correct Merchant ID when registering on the SIGIS website.

    • Refer to bulletins 13EXP08; 06MMS08 which show placement for MasterCard (MC ID) and Visa (MVV) IIAS values.

Customer Card Issues 

  • The card has not been activated or has been suspended

  • The card has no funds remaining, or the card has insufficient funds and the merchant does not support partial authorization

  • The cardholder is attempting to purchase only non-healthcare eligible items with a card that has only an FSA and/or HRA purse

  •  The participant’s plan only reimburses the prescription drug amount and

    • The merchant does not send the Rx amount in the auth message, or

    •  The plan requires a match to claim(s) from a pharmacy benefit manager (the cardholder’s prescription drug plan) and the transaction failed to match, or

    • The merchant sends the Rx amount but does not support partial auth and there are non-Rx items being purchased

  • The participant’s card has not been loaded with funds for the new plan year because of delays by the employer or TPA in getting the enrollment file to the issuer processor

  • The merchant sent an expiration date that does not match the date in the issuer processor’s system – this can happen when there is an error key entering the expiration date

  • The merchant manually keys in a card number that does not match a valid card on file with the issuer

  • The cardholder was issued a new card, either because his/her employer changed TPAs or she/he changed employers, but is continuing to use the old card that has been closed. 

Additional details and references for this article can be found on the SIGIS website (http://www.sig-is.org/) under the SIGIS Quicklinks section.