Affordability Safe harbor provided coverage is considered affordable if the premium constitutes less than 9.5% (adjusted annually) of the household income of an eligible employee for the plan year.
Health coverage affordability is an important part of complying with the ACA’s Employer Mandate. Failing to comply can result in penalties and fines. So, how do employers determine affordability? There are three affordability safe harbors that can be used: Form W-2, Federal Poverty Line (FPL), and Rate of Pay. ACA Employer Mandate The ACA Employer … Read more
Perhaps one of the more complex pieces of the ACA compliance equation is the affordability safe harbor provisions. At its simplest, coverage is considered affordable if the premium constitutes less than 9.66% of the household income of an eligible employee. Since this calculation takes into account the take home pay for spouses, it is often … Read more