HR Fast Facts: What Is Affordable Coverage for Health Insurance?

Affordable coverage under the ACA means that an employee’s required contribution for self-only coverage doesn’t surpass a certain percentage of their household income.

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Affordable coverage under the Affordable Care Act means that the employee’s required contribution for self-only coverage (meaning the amount to acquire coverage for only oneself, and not the cost for dependents) does not exceed a certain percentage of their household income.

Plan Year Beginning Affordability Percentage
2019 9.86%
2020 9.78%
2021 9.83%
2022 9.61%

Safe harbors

Because most employers won’t have access to their employees’ actual household incomes, the Internal Revenue Services provides 3 “safe harbor” methods that can be used to estimate income using information that employers do have.

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