Step 7: Test New Hires and File
Run the second test for variable-hour hires, then carry the status months forward into Forms 1094-C and 1095-C.
The three things to know.
Second Test
Place each new variable-hour hire in the first full standard measurement period after their start date.
Carry Months Forward
Status months feed the offer codes on the forms, so make sure each month is recorded.
File and Furnish
Meet the IRS filing dates, and post the furnishing notice or mail forms as you have elected.
Sources: 26 CFR § 54.4980H-3; IRS Notice 2025-15. General information, not legal advice.
A worked example.
A New Hire’s Second Test
A variable-hour hire’s initial measurement period ends in May. The standard measurement period then ends in October, and she is tested again.
What the Rule Produces
She averages 33 hours a week in the standard window and is found full-time for the next stability period, after her first stability period ends. Her status months flow to the 1095-C.
Four steps to apply it.
1. List new hires
Track initial periods.
2. Run the second test
Include them in the standard window.
3. Carry months
Record status by month.
4. File
Meet the IRS dates.
Where it goes wrong. Forgetting to record status months for people who changed status during the year.
The questions that come up next.
Who prepares the forms?
Often a reporting vendor, but the employer is responsible for accuracy.
When are forms due?
February 28 on paper, March 31 electronically, with furnishing by January 31 plus an automatic extension to about March 2.
What if we find an error?
Correct it promptly. Penalties are lower for early corrections.
Who files the forms?
Often a vendor, but the employer is responsible.
What if we find an error after filing?
Correct it promptly. Penalties are lower for early corrections.
Plan-specific questions belong with ERISA counsel, and we will bring them in.
Related pages on the look-back method.
Close and Total the Hours
Pull hours for every employee in the window, apply your equivalency method consistently, and apply the special unpaid leave averaging rules where they apply.
Notify and Offer
Tell employees found full-time that coverage is available for the stability period, and complete enrollment before January 1.
The Full Look-Back Guide
Every rule, example and source behind this page, in one place.
Talk it through with someone who runs this every year.
We help you choose the design, document it and reconcile the hours before the numbers reach your reporting.
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