The Complete Merchant's Guide to FSA/HSA Eligibility

Turn confusing IRS rules into a competitive advantage for your Shopify store.

Most Shopify merchants selling health or wellness products don't realize just how much of their catalog could be eligible for FSA/HSA spending. And even when they do, the eligibility rules are confusing, fragmented, and not designed for e-commerce.

Between IRS §213(d) tax code, SIGIS databases, and IIAS filters, merchants are left guessing. Worse, this creates uncertainty for shoppers, who won't add to cart if they don't know whether their FSA/HSA will work.

That's where Burst changes the game.

Shopping for something that's borderline-eligible? Burst issues a Letter of Medical Necessity in about three minutes.

Request my LMN →

Why Eligibility Feels So Hard

Traditionally, merchants had to navigate:

• SIGIS (Special Interest Group for IIAS Standards): SKU-level database built for big-box retailers like CVS/Walmart. Most Shopify brands aren't in it.

• IIAS (Inventory Information Approval System): A point-of-sale filtering system for in-store purchases. Not designed for online DTC flows.

• IRS §213(d): The actual rulebook of what counts as a medical expense. Dense, technical, and not mapped to Shopify SKUs.

Result: For DTC merchants, mapping products to SIGIS or running IIAS checks is nearly impossible, and doesn't actually solve the shopper experience problem.

SIGIS/IIAS vs. Burst Eligibility: Side-by-Side

Takeaway: SIGIS/IIAS was designed for pharmacies in the 1990s. Burst was designed for Shopify brands in 2025.

How Burst Simplifies Eligibility

Burst's eligibility engine cuts through the complexity:

• No SIGIS mapping, no IIAS codes, no SKU headaches

• Products are automatically categorized into three buckets:

  • ✅ Clearly eligible

  • 📄 LMN required (Letter of Medical Necessity)

  • ❌ Not eligible

• Updates happen automatically as IRS guidance evolves

👉 Merchants don't need to know the buckets themselves. Burst's Shopify app tags every product for you.

Pro tip: Want to check a product's eligibility bucket yourself? Just prepend its product URL with: getburst.com/[product-url]

Example:
getburst.com/yourstore.com/products/sunscreen-spf30

Why Shopper Education Matters

Even with perfect eligibility categorization, shoppers won't buy what they don't understand.

Your job as a merchant isn't to make them tax experts. It's to make them confident.

Best Practices for Shopper Education

1. Add clear badges

• ✅ “FSA/HSA Eligible” for clearly eligible products

• 📄 “FSA/HSA Eligible with LMN” for LMN-required SKUs

• ❌ Skip badges for ineligible products (avoid confusion)

1. Create dedicated collections

• Example: “Shop with Your FSA/HSA” or “Pre-Tax Savings Collection”

• Group all clearly eligible + LMN products in one place

1. Update product descriptions

• “This product qualifies for FSA/HSA reimbursement.”

• “This product is eligible with a Letter of Medical Necessity (automated by Burst).”

1. Build a quick FAQ section

• How do I use my FSA/HSA here?

• Do I need a doctor's note?

• How long does reimbursement take?

Why This Matters for Conversion

• Clarity builds trust → Shoppers add more to cart

• Badges reduce confusion → Lower cart abandonment

• Collections drive discovery → Higher AOV as shoppers browse more SKUs

• Education reduces CX tickets → Fewer “Is this covered?” questions for your team

Common Merchant Mistakes

• Not labeling products at all → Leaves shoppers guessing, kills conversions

• Over-promising eligibility → Leads to denied claims and frustration

• Avoiding LMN-required products → Misses high-margin revenue opportunities

How Burst Handles It End-to-End

With Burst:

• Products are automatically tagged in Shopify (✅, 📄, ❌)

• Badges and collections update dynamically

• Shoppers are guided post-purchase with eligibility + reimbursement instructions

• LMNs are generated automatically (<24 hrs) for products that need them

👉 Want to skip the SIGIS/IIAS mess and make eligibility automatic? See how Burst works for brands.

Next Steps

1. Install Burst's Shopify app

2. Let Burst auto-tag your catalog into the 3 buckets

3. Add badges + build an eligibility collection

4. Use Burst's post-purchase flows to educate shoppers automatically

The Bottom Line: FSA/HSA eligibility doesn't need to be a SIGIS/IIAS nightmare. With Burst, it's automated, transparent, and conversion-driving.

References

[1] IRS Publication 502, “Medical and Dental Expenses.”
[2] Burst. “Boost sales with friction-free FSA/HSA checkout.” getburst.com