IRS Announces Sharp Drop in 2024 Health Plan Affordability Threshold

Sep 7, 2023, 10:50 AM

(From SHRM)  The IRS has announced a significant drop in the 2024 health plan affordability threshold, used to determine ACA compliance. In 2024, it will be 8.39% of an employee's household income, down from 9.12% in 2023 — the lowest threshold since the ACA's start. This affects employer penalties and adjusts annually based on health plan premium growth relative to income. Employers can use safe harbors like W-2, rate of pay or the federal poverty level. Under the FPL safe harbor, the required employee contribution cannot exceed 8.39% of the FPL for an area, e.g., $101.94/month for the mainland U.S. Employers using exact amounts must reduce the lowest-cost employee contribution for the 2024 plan year.

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