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    What is an Inventory Information Approval System? (IIAS)

    The IRS requires many Merchants selling healthcare eligible products to support an Inventory Information Approval System (IIAS). The IIAS system is a combination of inventory management and point-of-sale systems that:

    1. Confirm the healthcare eligibility of items purchased with an FSA or HRA card.
    2. Generate a payment transaction that contains the required IIAS information.
    3. Includes an information archive system that allows the merchant to respond to any IRS audits as required.

    The components of an IIAS system will typically include:

    • An Inventory Management System that identifies healthcare eligible items based on the UPC code and compares them to the item purchased for nationally branded private label, and special promotionally packaged branded items. SIGIS provides a list of nationally-branded eligible products to its members. 
    • A health benefit card identification system capability to identify FSA and HRA cards via BIN ranges of all FSA and HRA cards. The list of required BINs is provided by the merchant's acquirer.
    • A payment authorization system/POS system that generates an IIAS transaction containing all required IIAS data elements, including an IIAS flag indicating an IIAS system was used, the HealthCare Eligible Amount, and if supported, the Rx/Prescription Amount. The Rx/Prescription Amount is a subset of the HealthCare Eligible Amount. This system should support partial authorizations to improve the handling and acceptance of FSA and HRA card transactions. 
    • Settlement System that supports the settlement of approved IIAS transactions containing the required IIAS information to a merchant acquirer. 
    • A Transaction Retention capability that supports the storage and retrieval of IIAS transactions to respond to IRS audit requests to confirm the eligibility of items purchased on an FSA or HRA card.

    Visit The Special Interest Group for IIAS Standards website for more details.

    If you have questions or require additional information, please submit a ticket and we will be in touch with you shortly.

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