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.
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