NU Online News Service, Nov. 5, 2003, 4:12 p.m. EST – Familymeds Inc., Farmington, Conn., has agreed to help Med-i-Bank Inc., Waltham, Mass., send extra transaction information to health plans and benefit plan administrators that use MBI debit cards to run flexible spending account and health reimbursement arrangement programs.

The Internal Revenue Service recently approved use of debit cards in FSA and HRA administration, but it said plans still must keep detailed transaction records to show that members’ expenditures comply with the regulations that govern FSA and HRA plans.

The IRS also ruled that FSA members can use FSA funds to pay for some over-the-counter drugs, such as allergy drugs that recently have switched from prescription to over-the-counter status. But plans have to collect the information necessary to substantiate that FSA members are spending FSA funds only on products eligible for FSA reimbursement.

Familymeds, a company that runs a Web-based pharmacy as well as brick-and-mortar pharmacies, has agreed to transmit specific, product-level data about Web-based purchases that will help FSA and HRA administrators comply with the IRS requirements, MBI says.