Compliance Minute – ACA Affordability Update
Marshall & Sterling E-Alerts - Keeping You in the Know
For the first time in the ACA’s history, the required contribution percentage used to determine whether employer-sponsored health coverage is “affordable” has been reduced.
For plan years beginning in 2018, employer-sponsored coverage will be considered affordable if an employee’s required contribution for self-only coverage does not exceed 9.56% of the employee's household income for the year (down from 9.69% in 2017).
With open enrollment season quickly approaching, employers will need to begin to finalize the prices of the plan or plans that it will offer its employees. Adjustments to the affordability percentage are important to employers as failure to offer affordable coverage to full-time employees may result in Pay or Play penalties that can be significant. So, it’s essential to get this percentage and the safe harbor calculation right.
For a brief overview on the “Who, What, & Hows” of Calculating ACA Affordability check out the most recent episode from our “Compliance Minute” video series. Click here to download the slides from the video.
As always, please do not hesitate to reach out with any questions.