Dear Clients,

The IRS has made a significant change pertaining to the implementation date for the 90% rule. The Rule will require that for a pharmacy to be eligible to accept FSA and/or HRA linked debit cards a pharmacy must either have an IIAS in place or have 90% or more of their gross sales from eligible items.

The IRS has offered transition relief by granting a 6 month extension from the original deadline; pharmacies now have until June 30, 2009 to comply with the 90% Rule.

With this transition relief participants will not experience disruptions or denials of their mySourceCard® swipes at pharmacies not complying with IIAS IRS requirements until June 30, 2009. Participants who choose to continue using a pharmacy that has not implemented the IIAS requirement will be required to submit receipts for substantiation.

To read IRS Notice 2008-104, click here.

Participants should talk with their favorite store to see if they will be in compliance by June 30, 2009. To find a listing of approved merchants, please click here.

Carrie Stout, CFCI
Director
DataPath Administrative Services, Inc.
501.687.6954 ext. 200
cstout@idpas.com