The IRS announced that employer-sponsored health coverage will satisfy the Affordable Care Act (ACA) affordability requirement next year if the lowest-cost, self-only coverage option an employer offers does not exceed 9.61 percent of an employee’s income.
The threshold in 2021 was 9.83 percent. It had risen from 9.78 percent in 2020.
The IRS annually adjusts the affordability threshold by considering the ratio of premium growth to income growth in the preceding calendar year. Because premiums for employer-sponsored health coverage increased at a lower rate than national income growth during 2021, due largely to a drop-off in the use of nonemergency health care services as cases of COVID-19 surged, the 2022 affordability percentage dropped below the 2021 level.