Since 2006, an amazing, but still very young, transformation has been taking place within the employee benefits industry. This is due to the introduction of the pre-programmed “smart” debit card within the world of flexible compensation benefits.
The Inventory Information Approval System, or IIAS, is a point-of-sale technology used by retailers that accept FSA debit cards, which are issued for use with medical flexible spending accounts (FSAs), health reimbursement accounts (HRAs), and some health savings accounts (HSAs) in the United States.
The IIAS was first introduced to brick-and-mortar retailing by Walgreens in 2006. Wal-Mart became the first discounter with an IIAS in late 2006. By the end of 2007, all grocery stores, discount stores, and online pharmacies that accept FSA debit cards were required to have an IIAS; by the end of 2008, most chain pharmacies were required to have an IIAS as well.
IIAS is similar to the system used by grocery stores since they first introduced barcode scanners in the 1970s. The system separates items eligible for purchase under the food stamp program from those that are not eligible. Every item in the grocery store's database is flagged "yes" or "no" for food-stamp eligibility; the scanner automatically keeps a separate total for food-stamp items. In the beginning, the cashier pressed a special "food-stamp total" key, and the customer presented paper food stamps; today, the customer swipes an Electronic Benefit Transfer (EBT) card and selects the "food stamp" account, and the register charges only the food-stamp total to the EBT card. The remaining balance must be paid for by other means. IIAS works in much the same way, but its database flags items that can be purchased according to IRS guidelines under FSA and HRA plans instead of food stamps.
TPA Systems is on the forefront of offering this innovative platform to our flexible compensation clients. We can offer debit cards to employees with first dollar HRA plans, flex plans, HSAs, or in any combination. These cards can be programmed to access the various flexible compensation plans installed by the employer in the order that the employer desires, and the cards can be quickly deactivated or reactivated at either the employer or the administrator level. Finally, we provide the plan documents necessary to ensure that the plans and debit cards function and interact with one another according to the stated rules.
TPAS is on the cutting edge of this important technology! To determine whether specific merchants are IIAS registered members, click below: