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2024 ACA threshold released

    September 13, 2023

    Health plan affordability dropped

     

    The IRS announced that the 2024 health plan affordability threshold—which is used to determine if an employer's lowest-premium health plan meets the Affordable Care Act's (ACA's) affordability requirement and affects employers' potential liability for ACA shared-responsibility penalties —will be 8.39 percent of an employee's household income. That's down from this year's 9.12 percent figure. The information was detailed in IRS Rev. Proc. 2023-29, which was released last week.

    If the employer's coverage is not affordable under one of the safe harbors and a full-time employee is approved for a premium tax credit for marketplace coverage, the employer may be subject to an employer shared responsibility payment, according to a compliance alert by insurance firm Woodruff Sawyer.

    For 2024 calendar-year plans using the federal poverty line (FPL) affordability safe harbor, the required employee contribution cannot exceed 8.39 percent of the FPL for a particular area—$14,580 for the mainland U.S. That comes out to $101.94 per month, down from $103.28 in 2023. For employees working in Alaska, the rate is $127.31 per month, while the rate in Hawaii is $117.25 per month.

    Employers should review the required employee contribution for 2024 coverage if they plan to meet the ACA's affordability limit under the applicable safe harbor.

     

    IRS Announces 2024 Health Plan Affordability Threshold (shrm.org)

     

    Commentary by: Raylea Stelmach

    Edited by:

     

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