ACA Employer Mandate: Affordability Limits

Employers with over fifty (50) full-time equivalent employees (FTE) are still required by the Affordable Care Act (ACA) to provide eligible employees ‘Affordable’ and ‘Qualified’ health insurance based on federal government guidelines. The IRS is tasked with deciding what is deemed ‘affordable.’ Originally set in 2015 at 9.56% of each employee’s household income, this rate is adjusted annually. 

In 2020 the rate will actually decrease to 9.78% of household income. The 2019 rate was 9.86%. Employers with lower wage employees, or with high employee premium contribution, still need to be diligent and review their health insurance strategy prior to the end of 2019. Allowing eligible employee’s contribution to slip below that mark could mean a penalty of up to $3,860 (estimated) per employee who exceeds this percentage.

Do you have questions about Affordability, the Employer Mandate or other ACA regulations? Reach out to us. We can review your current benefit plan(s) and suggest contribution strategy solutions before the end of the year to help you avoid a penalty.

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