Recent IRS updates to the Affordable Care Act (ACA) affordability percentage may lead to increased costs for employers in 2023. In Rev. Proc 2022-34, the IRS announced that the ACA affordability percentage for plan years beginning in calendar year 2023 will be 9.12%. This represents a .49% drop from the 2022 affordability threshold of 9.61%, which is a much more significant year-to-year change than in prior years.

The ACA affordability percentage affects whether the employer’s coverage satisfies one or more of the affordability safe harbors under the employer mandate regulations.

Please read the bulletin below for more information on the ACA affordability percentage, and the affordability safe harbors at the new threshold of 9.12%.

Employer Next Steps

Lowering the ACA afford ability threshold means that employer’s may need to contribute a larger amount towards employees’ cost of coverage to avoid ACA employer mandate penalties.


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This blog and its contents are not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.