The Internal Revenue Service (IRS) sets an annual affordability threshold that determines if an employer’s lowest premium health plan meets the requirements set by
the Affordable Care Act (ACA). The affordability threshold is used to determine employee-paid rates for the lowest-cost, self-only plan. If the cost of employee coverage does not meet the threshold, employers with more than 50 full-time employees could be subject to an IRS penalty. Benefit-eligible employees whose employer offer of coverage is deemed unaffordable, may be eligible for a premium tax credit through Healthcare.gov.
The 2023 ACA affordability threshold is 9.12%, which is a decrease from the 2022 limit of 9.61%.
| YEAR | AFFORDABILITY % | MAXIMUM MONTHLY PREMIUM CONTRIBUTION* | PRIOR YEAR FEDERAL POVERTY LEVEL (FPL) |
| 2023 | 9.12% | $103.28 | $13,590 |
| 2022 | 9.61% | $103.15 | $12,880 |
| 2021 | 9.83% | $104.52 | $12,760 |
*Maximum employee could pay for employer-sponsored, self-only coverage under the FPL safe harbor.
