as well, the risk from them was just as great. Therefore, two changes were made by IRS Ruling 2007–02 in December 2006: Grocers and discounters are allowed to keep accepting the cards until December 31, 2007; this was to give them sufficient time to install an IIAS. "True pharmacies" are required to install an IIAS after June 30, 2009, unless at least 90% of the individual pharmacy's sales are of "FSA-eligible" items, i.e., prescription drugs or over-the-counter (OTC) items. Most major pharmacy chains report that 60–65% of their sales come from the pharmacy; therefore, OTC would have to account for 25–30% of their total sales for them to qualify, which is unlikely—especially since each individual pharmacy must qualify separately. Therefore, only independent pharmacies are likely to qualify for the exemption. Because of this ruling, by 2009 most grocers, discounters, and chain or Internet pharmacies in the U.S. must have an IIAS in place in order to accept FSA debit cards. Importance of IIAS In addition to the above IRS requirements, IIAS is important in promoting the use of tax-favored health accounts, especially FSAs (which are usually set up by employees), for these reasons: While other IRS-approved "auto-adjudication" systems for electronic substantiation of FSA debit card charges are geared towards health plan expenses, such as copay matching or electronic transmittal of explanations of benefits, IIAS is the only one that is designed for use with over-the-counter drugs and similar items (OTC) as well as prescription drugs. IIAS is the first system with 100% "auto-adjudication" of an entire class of FSA debit card charges that has been widely adopted by the FSA industry. A few FSA vendors had previously used proprietary systems which provided 100% auto-adjudication of prescription charges thru a pharmacy benefits manager, but they ran into numerous technical and educational issues and were not adaptable to OTC. Some of the IRS rules on what OTC items are and are not eligible for FSAs have proven rather arcane in practice; for example, condoms are OK since they prevent pregnancy, but K-Y Jelly is not if it is used to lubricate them. IIAS effectively manages this problem by verifying eligibility of each OTC item at point-of-sale. Both paper claims and manual substantiation of FSA debit card charges often required the submission of receipts with "full names" of OTC items; but many stores abbreviate item names in such a way that it is