Compliant MCC’s or “90% Rule”

Today, Stripe is an approved acquirer that is helping merchants process HSA/FSA funds. To do so without a significant integration lift, there are generally two paths: (1) merchants can have one of the many medical/pharmacy pre-approved merchant category codes (MCC’s) or (2) attest that >90% of their volume processes HSA/FSA goods.

Information Inventory Approval Standard (IIAS) Certification

For non-traditional medical/pharmacy merchants who wish to process HSA/FSA funds, Stripe supports a range of options to help businesses get online with HSA/FSA payments - directly or indirectly.

The IIAS integration setup requires merchants to have an updated list of the items in their inventory that qualify for HSA/FSA funds.

• For merchants that have an inventory system that tracks HSA/FSA items, merchants can directly work with Stripe to enhance their integration to process HSA/FSA funds. Please reach out to Stripe support to request to begin the certification process.
• For merchants that do not have a ring fenced inventory for HSA/FSA items, Stripe has partnerships to enable any merchant to seamlessly accept HSA or FSA cards at checkout. Depending on your type of business, you may be immediately eligible to accept HSA/FSA funds or you may require some additional steps in order to accept payments in a manner that is IRS-compliant.

Note: Enabling an account to accept HSA or FSA payments does not guarantee a card will not be declined. Card issuers are still at liberty to authorize or decline any payment as they would with any other type of credit card.

Additional Information

Merchants that are selling products must first be registered with SIG-IS in order for their products to be deemed as “Eligible,” “Dual-Purpose” or “Ineligible.” In addition, the merchant must have an Inventory Information Approval System, or IIAS, in place to restrict the use of HSA/FSA cards only to eligible products. Finally, the merchant must be certified with SIG-IS and registered with Visa and Mastercard. Following these steps ensures that HSA/FSA payments will be processed without any declines (assuming cards are properly activated), and that purchases will be auto-substantiated (so that there is no need to provide receipts to prove eligibility of items purchased). Furthermore, no special MCC code is required in order to accept HSA/FSA funds as long as the above requirements are in place.

Merchants that are exclusively providing healthcare services (for example, doctor’s offices, optometrists, hospitals, and dentists), can accept HSA/FSA cards without the need for further registration. However, due to prohibitions on the use of HSA/FSA funds for cosmetic healthcare purchases, payments that are processed by healthcare services merchants may not be auto-substantiated. Note that if a healthcare services business sells any products (e.g., an ophthalmology service that also sells glasses), they are subject to the same requirements as merchants selling products, namely product registration, IIAS certification, and registration with SIG-IS, Visa, and Mastercard.

Some Stripe partners offer full-service solutions to support merchants in either category to navigate HSA/FSA payments.

Source: https://sig-is.org/