The IRS Notice 2006-69 allows for auto-adjudication for an additional category of claims under the merchant based inventory information approval system (IIAS). As described below, under such an arrangement, a real-time determination is made by the merchant at the point of sale of the amount of eligible medical expenses by comparing the selected items to a pre-approved list. No additional substantiation is required if a merchant compares the item or items to a pre-determined list maintained by the merchant of items sold by the merchant that constitute Code Section 213(d) expenses and restricts use of the Card only to those items that fall on that list. However, as noted below, the employer (or its TPA) must have access to claims level detail provided at the time of the transaction or a later date.

The IIAS system approves the use of the Card only for eligible medical care expenses; when a transaction is not approved in full, the employee must tender additional amounts, resulting in a split-tender transaction.

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