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Important Changes to FSA/HRA (Flexible Spending) Card Transactions

The IRS has published updated Flexible Spending Account (FSA) and Healthcare Reimbursement Account (HRA) card guidelines (IRS Notice 2006-69). As of January 1, 2008, if you are a non-medical/ non-pharmacy merchant you will need to use an Inventory Information Approval System (IIAS) if you wish to accept FSA/HRA cards. An IIAS will allow a merchant to identify the qualified medical items being purchased by the consumer at the point of sale (POS) and in real time. With an IIAS in effect, FSA/HRA debit cards can be used at a broader set of merchants including "non-medical merchants" (for example, grocery and discount stores). Please contact your POS equipment vendor for more information. If you do not use an IIAS for these types of transactions, they will be declined.

If you use a stand-alone terminal, you will not be able to accept FSA/HRA cards as a form of payment. These transactions will decline and you may be charged with any fees associated with a declined transaction. If you are presented with a FSA/HRA card as of January 1, 2008 and you do not have an IIAS, please ask for another form of payment.

Operating Procedure Guide Available Online
The Wells Fargo Merchant Services Operating Procedures Guide (PDF*) contains rules and regulations from the Card Associations that merchants follow. It describes the process for submitting bank card transactions for payment, obtaining authorizations, responding to chargebacks and media retrieval requests, and other aspects of processing payments. This Guide is referenced in your Merchant Processing Agreement and you should have received and reviewed it when you opened your account with us.
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