Have you ever looked down at your receipt from the drugstore and noticed a little “H” or “F” next to something you purchased? Those are actually health codes telling you which items on your receipt are qualifying medical expenses.
These codes are a quick way for you to see which items on your receipt can be paid for through your health savings account (HSA) or your flexible spending account (FSA), or are eligible for reimbursement through your health reimbursement arrangement (HRA).
In this article, we’ll help you understand how to read the codes on your receipts, where you can find them, and how they can help you more easily determine which items are HSA-, FSA-, and HRA-eligible.
Why are there health codes on my receipts?
IRS notice 2006-691 outlines that all stores and pharmacies that accept HSA, FSA, and HRA debit cards are required to have an inventory information approval system (IIAS) in place.
Through an IIAS, a store’s inventory and point-of-sale system needs to have the ability to verify that the items being purchased with an HSA, FSA, or HRA debit card are eligible medical expenses, as defined by IRS Publication 502.
Here are just a few common IIAS-compliant stores and major pharmacies that have health codes on their receipts:
- CVS Pharmacy
- Rite Aid
- Sam’s Club
What do receipt health codes look like?
The health codes will look slightly different depending on where you’re shopping. For example, Walmart puts an "H" at the end of the barcode for each item to indicate that it’s HSA-approved, whereas CVS Pharmacy flags FSA-eligible purchases on every receipt with an "F."
Other stores, such as Walgreens, make it a little easier by putting a unique FSA/HSA total on the bottom of the receipt in addition to marking each individual item with its own code.
That way, if you buy non-eligible items or other additional purchases, such as groceries or cosmetics, you can see the exact total of only the items that qualify as medical expenses without purchasing those items separately.
Do I have to use a health debit card to see the codes on my receipt?
While only stores that accept health debit cards are required to print these health codes, all customers will see them on their receipt whether or not they used a health debit card for payment.
In addition, just because something is marked on your receipt as a qualified medical expense doesn’t mean you have to use your HSA, FSA, or HRA to pay for it. The code simply shows you which items are eligible, but you’re welcome to use any payment method you choose.
Whether you use a debit card, credit card, or health debit card as a form of payment for a qualified medical expense, you should save your receipts so you have a record of it.
Why should I care about health codes?
Paying attention to these health codes is especially important for employees with an HRA. That’s because to get reimbursed through an HRA, you need to submit a receipt showing that what you’re requesting for reimbursement is an eligible product.
Having these codes on your receipt is an easy way for both you and your HRA plan administrator to quickly see that you’ve made a qualifying health purchase and will be able to get reimbursed for that item. You may even notice an “H” or “F” next to something you didn’t know was eligible for reimbursement.
In addition, if you have a receipt that totals all of your health-related expenses, that enables you to to purchase your regular groceries alongside the items you want to get reimbursed through your HRA because the codes will divide the health expenses and the non-health expenses for you.
Knowing how to read your medical receipts will come in handy when you decide to take steps to control your health costs. Understanding the health codes on your receipts makes it much easier to identify eligible items at merchandise stores, allowing you and your family to get reimbursed much faster.
Purchasing items through a health account or reimbursement benefit plan, like an HRA through PeopleKeep, is a great way to save on your medical supplies and other eligible expenses, and enjoy the potential federal tax return advantages that come with it.
This article was originally published on November 4, 2021. It was last updated on August 15, 2022.