ACA Affordability Threshold Rises in 2019

For plan years beginning in 2019, the Internal Revenue Service has announced that coverage will generally be considered affordable if the employee's required contribution for the lowest cost self-only health plan offered is 9.86% or less of his or her household income for the taxable year. For plan years beginning in 2018, the applicable percentage is 9.56%.

Because employers are unlikely to know an employee's actual household income, they may use a number of IRS provided safe harbors to determine affordability of their plan offerings. 

This E-Alert is of interest to applicable large employers - generally those with 50 or more full-time employees (including full-time equivalent employees). Under the ACA’s employer shared responsibility ("pay or play") provisions, large employers may be subject to a penalty if they do not offer affordable coverage that provides minimum value to their full-time employees and their dependents.

As always, please do not hesitate to reach out to our Group Benefits team with any questions or concerns.