FMI Applauds IRS Ruling to Allow Consumers
to
Use Health Benefit Debit Cards at Supermarkets
'A
Victory for Consumer Convenience'
ARLINGTON, VA - December
18, 2006 - The Food Marketing Institute
(FMI) today applauded the December 14
IRS ruling that consumers may use Health
Reimbursement and Flexible Spending Account
(HRA/FSA) debit cards at all supermarkets
and mass merchant outlets.
Previously, the IRS held that consumers
could redeem benefits with HRA and FSA
debit cards only at drug stores until
supermarkets and mass merchants install
the technology to process these transactions,
known as an information inventory approval
system (IIAS).
"This is a victory for consumer convenience.
It frees them to obtain valuable health
benefits at retail stores everywhere,"
said FMI President and CEO Tim Hammonds.
"FMI members have advocated for years
that consumers should be able to use their
FSA and HRA debit cards in supermarkets,
responding to consumer frustration over
the limits.
"FMI conveyed these concerns to the
IRS, prompting the agency to issue the
ruling clarifying that these limits would
be lifted during the time period that
supermarkets and mass merchants install
the IIAS technology. In fact, once these
systems are in place, customers will no
longer have to retain paper receipts or
submit them to their HRA and FSA plan
administrators."
The IRS ruling will allow for debit card
purchases of hundreds of millions of dollars
in drugs and other products that qualify
for the benefits at supermarkets and mass
merchant outlets in 2007, according to
FMI estimates.
The ruling is timely because debit benefit
plan administrators were processing FSA
and HRA debit card transactions under
a 2003 IRS guidance document that appeared
to them to classify supermarkets and mass
retailers as "medical merchants."
The IRS recently rejected this interpretation,
and administrators announced plans to
stop accepting debit card transactions
from them on January 1, 2007. Under the
new ruling, they are allowed to continue
accepting these transactions in 2007.
Food
Marketing Institute (FMI) conducts programs
in research, education, industry relations
and public affairs on behalf of its 1,500
member companies - food retailers and
wholesalers - in the United States and
around the world. FMI's U.S. members operate
approximately 26,000 retail food stores
with a combined annual sales volume of
$340 billion - three-quarters of all retail
food store sales in the United States.
FMI's retail membership is composed of
large multi-store chains, regional firms
and independent supermarkets. Its international
membership includes 200 companies from
50 countries.
Contact:
Food Marketing Institute (FMI)
Bill Greer
202-220-0667
wgreer@fmi.org