What does IRS affordability change mean for TY24 ACA compliance?

Internal Revenue Service federal building Washington DC USA

In late August the IRS announced changes to the 2024 health plan affordability threshold. [See IRS Rev. Proc. 2023-29.] This is the measure used to determine if an employer’s lowest-premium health plan meets ACA affordability requirements.

The 2024 threshold will be 8.39% of an employee’s household income. That is significantly down from this year’s 9.12% and the lowest threshold since the ACA was implemented. [See Society for Human Resources Management.]

What does that mean for your company’s TY2024 ACA compliance?

For 2024 calendar-year plans using the Federal Poverty Line (FPL) affordability safe harbor, the required employee contribution now cannot exceed 8.39% of the FPL. That means a maximum of $14,580 for mainland US or $101.94 per month, down from $103.28 in 2023. For employees working in Alaska, the rate is $127.31 per month; and in Hawaii, $117.25 per month.

Contact BENEFITSCAPE for help reviewing and processing the impact of this IRS change on your company’s ACA compliance and filings.

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