The Internal Revenue Service (IRS) issued Revenue Procedure 2017-36 to index the contribution percentages in 2018 for purposes of determining affordability of an employer’s plan under the Affordable Care Act (ACA). For plan years beginning in 2018, employer-sponsored coverage will be considered affordable if the employee’s required contribution for self-only coverage does not exceed:
9.56 percent (2017 was 9.69%) of the employee’s household income for the year, for purposes of both the pay or play rules and premium tax credit eligibility; and
8.05 percent (2017 was 8.16%) of the employee’s household income for the year, for purposes of an individual mandate exemption (adjusted under separate guidance).
PBG will be assisting clients with determining affordability under the new guidelines.
Although there has been much talk in Washington, DC about repealing the ACA, it is the law of the land and employers must remain in compliance with it. PBG is closely monitoring the situation and will continue to update you on any changes to the law.