Affordability Safe Harbors

Determining the affordability of the health coverage offered to your full-time employees and their dependents can be a bit complex. To put it simply, provided coverage is considered affordable if the premium constitutes less than 9.69% of the household income of an eligible employee.

Since household income can be difficult to determine, due to factors such as spousal or secondary income, the IRS offers three safe harbor options to assist in determining affordability: Continue reading Affordability Safe Harbors

Part 4 – Determine Which Affordability Safe Harbor to Use (2016)

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 9.8% of the household income of an eligible employee. Since this calculation takes into account the take home pay for spouses, it is often difficult (if not impossible) for a large employer to make this calculation, so the IRS has provided 3 alternative calculations that they refer to as affordability safe harbors. Continue reading Part 4 – Determine Which Affordability Safe Harbor to Use (2016)