The IRS announced that the 2025 health plan affordability threshold—which is used to determine if an employer's lowest-premium health plan meets the Affordable Care Act's (ACA's) affordability requirement—will be 9.02 percent of an employee's household income. That's an increase from this year's 8.39 percent figure. The information was detailed in IRS Rev. Proc. 2024-35, which was released on September 9th.
Revenue Procedure 2024-35
Affordability and Minimum Value
IRS
Additional Articles
Employers should review the required employee contribution for 2025 coverage if they plan to meet the ACA’s affordability limit under the applicable safe harbor. For the many plans using the FPL affordability safe harbor, the considerations differ for calendar- and noncalendar-year plans.
2025 affordability percentage for employer health coverage increases
Mercer | Sep 2024
The ACA’s employer-shared responsibility rules (also known as the employer mandate) require an employer to provide affordable, minimum-value coverage to its full-time employees. The IRS required contribution percentage is used to determine whether an employer-sponsored health plan offers an individual affordable coverage, and the affordability percentage is adjusted for inflation each year.
IRS Releases 2025 Required Contribution Percentage for Affordable Coverage
NFP | Sep 2024
The affordability test applies only to the portion of the annual premiums for self-only coverage and does not include any additional cost for family coverage. Also, if an employer offers multiple health coverage options, the affordability test applies to the lowest-cost option that provides minimum value.
Affordable Care Act Employer Mandate Pay-or-Play Affordability Percentage Will Increase for 2025
Leavitt Group | Sep 2024
If an applicable large employer fails to offer affordable coverage for one or more full-time employees, then the employer is subject to the Employer Shared Responsibility Payment for each full-time employee for which coverage is not affordable and the employee obtains subsidized Marketplace coverage. Like the affordability threshold, this penalty amount is indexed for inflation. The initial penalty amount of $3,000 (in 2015) is now $4,350 for 2025, a decrease from 2024's annualized penalty of $4,460 per affected employee
ACA Affordability Threshold Increase for 2025
Calfee | Sep 2024
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