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ACA’s Affordability Contribution Percentage Increased for 2017

ACA’s Affordability Contribution Percentage Increased for 2017

On April 12, 2016, the Internal Revenue Service (IRS) issued Revenue Procedure 2016-24 to index the contribution percentages in 2017 for purposes of determining the affordability of an employer’s plan under the Affordable Care Act (ACA).

For plan years beginning in 2017, employer-sponsored coverage will be considered affordable if the employee’s required contribution for self-only coverage does not exceed:

  • 9.69 percent of the employee’s household income for the year, for purposes of both the pay or play rules and premium tax credit eligibility; and
  • 8.16 percent of the employee’s household income for the year, for purposes of an exemption from the individual mandate.

These updated affordability percentages are effective for taxable years and plan years beginning after Dec. 31, 2016.

Click the link below for the full legislative brief.

ACAs Affordability Contribution Percentage Increase for 2017