Keep the hours report for each window, the status list, the notices and the offers, with dates. These are the file you would use to show the IRS the 95% offer test was met.
Hours-of-service data, the method and equivalency used, a status for each employee and month, and the dates of every offer and waiver.
Your plan document, summary plan description and the notices you sent, with dates, show that the design was real and communicated.
A single, dated location, with access for the people who prepare the forms, saves days during a letter response.
Sources: 26 U.S.C. § 4980H. General information, not legal advice.
An employer receives an IRS letter proposing a payment for a month two years ago, asserting that an employee was full-time and not offered coverage.
Because the employer kept the hours report, the status list and the dated offer, it shows the employee averaged 27 hours a week over the measurement period and was not full-time. The letter is answered with the file.
Set up one folder per period.
Keep hours reports and status lists.
Retain offers and waivers.
Limit who can edit.
Where it goes wrong. Overwriting hours data when payroll systems change.
Keep them at least as long as the relevant statute of limitations runs. Ask your tax advisor for the period that fits your facts.
Archive the old data and your method description before migrating.
The employer. Vendors can maintain records, but the plan sponsor is responsible for them.
At least as long as the relevant limitation period. Ask your tax advisor.
Yes, but you remain responsible for it.
Plan-specific questions belong with ERISA counsel, and we will bring them in.
For employees found full-time, the stability period must be at least as long as the measurement period and no shorter than six months.
The 90 days include every gap between a new hire’s start date and the first offer of coverage, other than the measurement period itself.
Every rule, example and source behind this page, in one place.
We help you choose the design, document it and reconcile the hours before the numbers reach your reporting.
An independent employee benefits consulting firm. We look at the entire benefits program — cost, plan performance, risk and administration.
Switch to CFH. Unhappy with your broker? Your employees won’t notice. You will. →
We use cookies to keep the site working properly and to understand how it is used. You can decline anything that is not essential. See our Privacy Policy for the detail.