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2022 Affordability Percentages Will Decrease

2022 Affordability Percentages Will Decrease

1.5 minute read

The IRS recently announced that the contribution percentages used to determine affordability for an employer’s health plan under the Affordable Care Act will decrease. For plan years starting in 2022, employer-sponsored coverage will be considered affordable if the employee’s required contribution for self-only coverage does not exceed:

  • 61% of the employee’s household income for the year both the pay or play rules and premium tax credit eligibility
  • 09% of the employee’s household income for the year under an exemption from the individual mandate. Although this penalty was reduced to zero in 2019, some individuals may need to claim an exemption for other purposes.

The updated percentages are effective for taxable years and plan years beginning January 1, 2022. This is a significant decrease from the affordability contribution percentages for 2021. As a result, some employers may need to lower their employee contributions for 2022 to meet the adjusted percentage.

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This blog is intended to be a compilation of information and resources pulled from federal, state, and local agencies. This is not intended to be legal advice. For up to the minute information and guidance on COVID-19, please follow the guidelines of the Centers for Disease Control and Prevention (CDC) and your local health organizations.

National Insurance Services is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Readers are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the readers’ business activities.

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Mark Treba

Mark Treba

Mark Treba sees his position at National Insurance Services as a way to help serve clients and make a positive impact in their communities. “I am always striving to better understand the needs of my clients,” he states, “in order to have their best interest in mind.” Mark also enjoys the challenge of resolving the ‘unsolvable problem’. “People often say that I am a great teacher and have the ability to convey difficult concepts in a way that is easy to understand.” Mark is a licensed health and life insurance agent working with school districts, cities, and counties. He has over 10 years of customer service experience and has a Group Benefits Disability Specialist designation (GBDS).