The Internal Revenue Service (IRS) recently released Revenue Procedure 2018-34 which includes details about the affordability percentage related to the Employer Mandate for the upcoming year. In 2019, coverage will be considered affordable if an employee has to pay no more than 9.86% of their household income for self-only coverage. As most employers don’t know the household income of their employees, three alternative safe harbor methods may be used:
A summary of the Employer Mandate affordability percentages since its inception has been provided below. If you recall, the Employer Mandate was originally set to take effect in 2014, but it was delayed until 2015. The original 9.5% affordability percentage has been adjusted each year for inflation.