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Eligible Merchant Categories & SIC Codes for HSA/FSA Acceptance

Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) can only be used at merchants who meet specific IRS-defined criteria. The eligibility of a merchant is determined by its assigned Standard Industrial Classification (SIC) code, which reflects the type of goods or services sold.

This article outlines the two key categories of eligible merchants:

  • Standard Eligible Healthcare Merchants

  • 90% Rule Merchants (Primarily Pharmacies)



Standard Eligible Healthcare Merchant Categories

Merchants in these categories are automatically eligible to accept HSA/FSA cards, provided their SIC code matches one of the IRS-recognized healthcare-related codes.

Eligible SIC Codes:

SIC Code Merchant Category
8011 Offices & Clinics of Doctor of Medicine
8021 Offices & Clinics of Dentists
8031 Offices & Clinics of Doctors of Osteopathy
8041 Offices & Clinics of Chiropractors
8042 Offices & Clinics of Optometrists
8043 Offices & Clinics of Podiatrists
8049 Offices & Clinics of Other Health Practitioners
8050 Offices & Clinics of Nursing and Personal Care Facilities
8062 Offices & Clinics of General Medical and Surgical Hospitals
8071 Medical and Dental Laboratories
8099 Miscellaneous Health and Allied Services

**Not elsewhere classified
 Notes:

  • These codes are typically assigned by the merchant's acquirer or payment processor.

  • Merchants in these categories can accept HSA/FSA cards without additional certification or reporting requirements.

90% Rule Merchants (Primarily Pharmacies)

Merchants who do not fall under standard healthcare categories may still qualify to accept HSA/FSA payments if they meet the IRS “90% Rule.”

What is the 90% Rule?

Under IRS guidelines, a merchant may qualify if:

  • 90% or more of their gross sales (excluding taxes) are from eligible medical products or services.

  • These merchants must register and certify compliance through an industry-approved process.

Important: To accept HSA and FSA cards without using an Inventory Information Approval System (IIAS), a merchant must follow the IRS "90% Rule." This means that at least 90% of their total sales (before taxes) must come from eligible healthcare items, such as prescriptions and over-the-counter medical products. If they meet this rule, transactions can be automatically approved as eligible.


Commonly Eligible SIC Codes for 90% Rule:

SIC Code Merchant Category
5912 Drug Stores and Pharmacies
5122 Drug Proprietaries and Sundries Wholesalers
 

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Disclaimer:
To accept Health Savings Account (HSA) cards, all merchants must be registered with SIGIS (Special Interest Group for IIAS Standards).

 

You can verify a merchant's registration status by visiting the SIGIS website..

  1.  At the top of the page, click on the "Store Locator" banner.
  2. From there, enter the merchant’s DBA (Doing Business As) name and store address to search the registry.

For additional assistance, you may contact SIGIS directly at 925-855-3228.

 

Why Merchant Classification Matters

Issuers and card processors use SIC codes to determine whether a transaction is eligible for HSA/FSA reimbursement or approval. If a merchant is not properly classified, transactions may be declined automatically, even if the purchase is for a qualified expense.

Tips for Merchants:

  • Check your SIC code with your payment processor or acquiring bank.

  • Consider reclassification if you're a healthcare provider with an incorrect or generic SIC.

  • Pharmacies or multi-purpose retailers (e.g., supermarkets with pharmacy counters) should consider 90% Rule certification for eligibility.

See Also: