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R&R Insurance Blog

ACA Affordability Percentages Will Decrease For 2020

Posted by the knowledge brokers

affordability percentages decreaseOn July 23, 2019, the Internal Revenue Service (IRS) issued Revenue Procedure 2019-29 to index the contribution percentages in 2020 for purposes of determining affordability of an employer’s plan under the Affordable Care Act (ACA). The ACA’s employer shared responsibility or play or pay rules require ALEs (Applicable Large Employers) to offer affordable, minimum value health coverage to their full-time employees (and dependents) or pay a penalty. ALEs are those employers with an average of 50 or more full-time and full-time equivalent employees during the preceding calendar year.

For plan years beginning in 2020, employer-sponsored coverage will be considered affordable if the employee’s required contribution for self-only coverage does not exceed 9.78% of the employee’s household income for the year, for purposes of both the pay or play rules and premium tax credit eligibility.

For more details, read more here. If you have any questions, please contact a KnowledgeBroker today!

Topics: Employee Benefits