The IRS announced the new annually indexed percentage for affordability under the Affordable Care Act’s employer mandate provision. Per Rev. Proc. 2020-36, applicable large employers (ALEs) can charge no more than 9.83% of income for plan years beginning on/after January 1, 2021. This represents an increase from the 2020 percentage of 9.78%. Therefore, some employers may be able to slightly increase their employee contribution for single coverage and avoid potential ACA penalties.

See bulletin below for more information about affordability and other ACA provisions.

 

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