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ACA Affordability Percentages Increased for 2016

Posted 03.03.15

For 2014, employer-sponsored coverage was generally considered to be affordable under the pay or play rules if the employee’s required contribution for self-only coverage did not exceed 9.5% of the employee’s household income for the year.

This required contribution percentage was adjusted to 9.56% for 2015 and 9.66% for 2016. However, employers using an affordability safe harbor under the pay or play rules will continue using a contribution percentage of 9.5% to measure their plan’s affordability.

The affordability test applies only to the portion of the annual premium for self-only coverage, and does not include any additional cost for family coverage.

http://www.irs.gov/pub/irs-drop/rp-14-62.pdf

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