Updated April 27, 2020

To know which employees the Affordable Care Act says that an employer must cover – and thereby get offers of coverage out soon enough to avoid IRS penalties – an employer can use the look-back eligibility-testing method.

This method is a way of determining full-time status. Form 1095-C is the IRS form that documents an employee’s access to health insurance at their place of employment. To complete Form 1095-C, an employer can use the look-back method in order to provide the required tracking of every employee’s hours, for both variable-hour employees and full-time employees.

Remember, documentation of this ACA tracking is mandatory even:

The ACA look-back measurement method

One method an employer can use to identify employees as full-time is the look-back measurement method. Using this method, an employer can create a testing period that spans a number of months.

  • The look-back period cannot be less than 3 months, and it cannot be more than 12 months

Using the look-back method, an employee’s hours of service are calculated to see if, over the entire testing period, they averaged 130 hours per month. When the calculation of hours does pass this test, the employer is obligated to provide the employee access to health coverage during a corresponding stability period.

That stability period, which cannot be less than 6 months, generally mirrors the length of the test months. So if you have a 12-month measurement testing period, you would have a 12-month s