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ACA Affordability Contribution Percentages Decrease for 2020

affordability contribution percentages

1 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 2020, employer-sponsored coverage will be considered affordable if the employee’s required contribution for self-only coverage does not exceed:

  • 9.78% under the employer shared responsibility mandate (for applicable large employers, also known as the employer mandate or pay or play rules)
  • 9.78% under the premium tax credit eligibility rules (for low-income people to purchase health coverage through the Exchange)
  • 8.24% under an exemption from the individual mandate (tax penalty for individual who fail to obtain health coverage)

Note that this is a decrease from the affordability percentages for 2019. Public sector employers may need to review their plans and possibly lower their employee contributions for 2020 to meet the adjusted percentages. Download the bulletin for more information.

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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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Jason Rushton

Jason Rushton

Jason Rushton’s personal philosophy is to improve himself daily - as a father, basketball coach, and benefits consultant. He is one of those rare, down-to-earth people who is honest, hard-working, and loyal. Jason’s customers aren’t just clients to him but rather long-term partners. Jason has been providing full benefits consulting in Michigan since 2009. He has worked with several local Michigan unions on their collective bargaining process including mediation, negotiations, writing contract language, and more. He has completed the MSBO Leadership Institute program, been a featured speaker at the MSBO and MASA conferences and has been on several panel discussions about the Affordable Care Act. Jason is a licensed life and health insurance agent. He provides full benefit consulting for schools, cities, and counties in Michigan, Ohio, and North Carolina.