The IRS recently issued Revenue Procedure 2023-29, lowering the affordability threshold for the 2024 calendar year to 8.39% of annual household income from the 2023 threshold of 9.12%. The threshold is the lowest in the history of the Affordable Care Act (ACA).
| YEAR | AFFORDABILITY % | MAXIUM PREMIUM CONTRIBUTIONS* | FEDERAL POVERTY LEVEL (FPL) |
| 2024 | 8.39% | $101.94 | $14,580 |
| 2023 | 9.12% | $103.28 | $13,590 |
| 2022 | 9.61% | $103.15 | $12,880 |
*Maximum an employee could pay for employer-sponsored, self only coverage using the FPL affordability safe harbor. Employers may also adopt the rate-of-pay or W-2 affordability safe harbors.
This percentage is used to determine an individual’s eligibility for a premium tax credit (PTC) through Healthcare.gov and the affordability of employer-sponsored health coverage. The percentage applies on a plan-year basis, so non-calendar year plans will continue using the 9.12% rate until their 2024 plan renewal.
Failure to provide a benefit-eligible employee with affordable coverage can result in an employer shared responsibility penalty under the ACA. The affordability percentage is adjusted each year based on health plan premium growth relative to income growth reported by the Centers for Medicare & Medicaid Services.
For more information, contact your Bukaty benefits consultant at 913.345.0440.