| Beginning January 1, 2009 a new IRS regulation | | | | acknowledgment as they are branded as normal |
| requires pharmacies to have implemented an IIAS | | | | VISA or MasterCard credit cards. The IRS is now |
| (inventory information approval system) compliant point | | | | implementing a qualifying requirement, similar to the |
| of sale system. To comply with these new regulations, | | | | Food Stamp program, which designates eligible items |
| every pharmacy in the United States must implement | | | | that can be purchased with the FSA card. Non-eligible |
| a POS system that complies with these new | | | | items will have to be paid for with a different form of |
| requirements or discontinue the acceptance of FSA | | | | payment. A IIAS compliant POS system must be able |
| (flexible spending account) credit and debit cards. | | | | to maintain this eligibility list, have the functionality to |
| In addition to the new IRS requirements, the | | | | separate the items and perform a split tender for |
| government has also recently signed into law the | | | | eligible versus non-eligible items. The system will also |
| Economic Stimulus Plan (ESP). The most significant | | | | be required to produce audit reports that adhere to |
| stimulus for pharmacies is the bonus depreciation that | | | | IRS specifications and maintain five years of audit |
| the plan offers for capital purchases. This allows a | | | | history.b. If a retailer or pharmacy does not have an |
| business to expense a capital purchase 100% in the | | | | IIAS compliant POS system on January 1, 2009, they |
| first year (up to $250,000.00) if it is put into service | | | | will no longer be able to accept FSA debit/credit |
| during the 2008 calendar year. This benefit returns to | | | | cards.c. Pharmacies will risk losing existing customers |
| normal depreciation starting in 2009 (5 year | | | | and sales to pharmacies who have implemented an |
| depreciation schedule). Both laws implemented by the | | | | IIAS system beginning January 1, 2009.d. Visa has an |
| IRS will force pharmacies to purchase/upgrade POS | | | | established marketing campaign targeted towards |
| systems in the 2008 year if they want to remain | | | | every FSA/HRA cardholder. This marketing program |
| compliant with the new IRS regulations. | | | | educates cardholders on IIAS requirements and |
| 1. IIAS - Inventory Information Approval System. | | | | compliant merchants. |
| Beginning in 2009, the IRS is requiring all pharmacies to | | | | 2. Economic Stimulus Plan (ESP) of 2008 - The |
| have implemented an IIAS compliant POS system if | | | | President signed into law the ESP on February 13, |
| they want to continue accepting FSA (Flexible | | | | 2008. This act returns the 50% Bonus Depreciation for |
| Spending Account) debit/credit cards. These credit | | | | the 2008 year and also increases the Section 179 |
| cards are issued to employees of companies who | | | | expense purchases maximum allowance to |
| have elected to withhold a portion of their pay in a | | | | $250,000.00. This will allow a pharmacy to expense a |
| non-taxable Flexible Spending Account or Health | | | | point of sale system purchase in the 2008 year and |
| Savings Account (HSA).a. To date, most pharmacies | | | | reduce their tax liability. |
| and retailers accept these credit cards without | | | | |