What is affordable coverage under ACA?

Affordable coverage under the ACA 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 2020 9 .78% 2021 9 .83% 2022 9 .61% 2023 9 .12% All of the plans […]

Zenefits Team on Oct 19, 2023

Affordable coverage under the ACA 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
2020 9 .78%
2021 9 .83%
2022 9 .61%
2023 9 .12%

All of the plans offered by the employer do not have to meet this affordability threshold — for purposes of the ACA we just look at the self-only employee contribution for the “best plan” that was offered.

Safe Harbors

Because most employers won’t have access to their employees’ actual household incomes, the IRS provides three “safe harbor” methods that can be used to estimate income using information that employers do have.
  • W2 Wages Safe Harbor
  • Rate of Pay Safe Harbor
  • Federal Poverty Line Safe Harbor
About the author

Zenefits Team

We are the humans behind TriNet-Zenefits, People Operations leaders working tirelessly to inform and grow small businesses and their teams. We focus on you, the other 97% of U.S. companies that power our economy. www.zenefits.com

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