The IRS recently issued an update to determine the affordability of an employers plan under the ACA (Affordable Care Act).

These updates will be effective for the taxable years and plan years beginning January 1, 2019.

As a result, some employers may have additional flexibility with the rasped tot their employee contributions for 2019 to meet the adjusted percentage.

AFFORDABLE COVERAGE TEST                                                                                                     For plan years beginning in 2019, employer-sponsored coverage will be considered affordable if the employee’s required contribution for self-only coverage does not exceed:

  • 9.86% of the employee’s household income for the year, for purposes of both the pay or play rules and the premium tax credit eligibility.
  • 8.3% of the employees household income fo rate year, for purposes of an individual mandate exception (adjusted under separate guidance).

To read more on the IRS Revenue Procedure, click HERE.

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