Welcome to MSEC’s weekly ACA FAQ on reporting. While details on how to complete IRS forms 1094 and 1095 (such as what codes to use on specific lines of the form) will not be covered, general questions on reporting requirements will be answered. For detailed information on form completion, contact your tax advisor, payroll company, or insurance carrier. If you have a general ACA reporting question, email it to email@example.com. The most commonly asked questions will be answered in this forum. In addition, the Health Care Reform Learning Zone, found on the MSEC website (msec.org), is a rich source of information about the Affordable Care Act (ACA).
Q: How long do I need to retain the ACA reporting forms and supporting documentation?
The IRS instructions for Forms 1094-C and 1095-C state copies of information returns, or the data needed to reconstruct the returns, generally must be kept for at least three years from the due date of the return.
However, at this early stage in ACA reporting, an eight-year retention period, instead of three, is suggested.
Retention guidance may change once the IRS and the DOL begin to conduct audits and make ACA penalty determinations. For now, having the information available so you can respond to questions if you’re audited or assessed a penalty would be best.
It is recommended that this information be kept separate from any other IRS reporting your organization does. Keep all the back-up data that was used to create the forms. Examples of back-up data include:
- Information on health plan offers and enrollment information for participants
- Records of employee premium costs
- Hours tracking reports used to determine eligibility for health plan coverage, especially for variable hour and part-time employees. This may entail keeping data back several calendar years prior to the plan year, in order to determine how eligibility during a specific stability period was determined. For example, coverage offered in 2015 may have been determined by hours worked in in 2014 and even back into 2013 for variable hour employees.
- Information on the safe harbor code(s) used, and what segments of your employee population use which codes.