ACA Affordability Percentage Decreased for 2022

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Beginning January 1, 2022, the new affordability percentage for employer-sponsored coverage will be reduced to 9.61% of the employee’s household income. This is applied to self-only coverage for the lowest priced ACA compliant plan offered by the employer.

Applicable Large Employers (ALEs) should be made aware of this new affordability percentage in an effort to offer affordable, minimum value health coverage to their full-time employees. The decrease in the percentage means that employers may need to increase their portion of the premium contribution to comply with affordability requirements.

As we have seen in this past, the Internal Revenue Service (IRS) instituted three safe harbors for employers to utilize:

  • The W-2 Safe Harbor
  • The Rate of Pay Safe Harbor
  • The Federal Poverty Level Safe Harbor

For 2022, the FPL for an individual is $12,880. The employee contribution, in order to satisfy safe harbor, is $103.14/month or less.

Employers should also be mindful of potential penalties if the employee contribution exceeds 9.61% and the employee purchases an individual plan on the exchange and receives a Premium Tax Credit (PTC)

For any questions or concerns please contact Misty Baker at or David Mordo at

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