ARTICLE
28 May 2024

Large ACA Affordability Decrease For 2024

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Kutak Rock LLP

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Kutak Rock is a national law firm with over 550 attorneys across the U.S., built on a foundation of teamwork, innovation, and exceptional client service. Originally focused on finance, the firm has evolved into a leading provider of legal services in business and corporate law, public finance, litigation, and real estate. Emphasizing collaboration across offices, Kutak Rock delivers integrated legal solutions to business and governmental clients. The firm is committed to long-term sustainability, attorney engagement, and community impact through significant pro bono work. It also prioritizes keeping clients informed with timely legal insights and updates.

To avoid an employer shared responsibility payment, the Patient Protection and Affordable Care Act ("ACA") requires applicable large employers to, among other things...
United States Employment and HR

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To avoid an employer shared responsibility payment, the Patient Protection and Affordable Care Act (“ACA”) requires applicable large employers to, among other things, offer full-time employees and their dependents affordable  health plan coverage that provides minimum value. Applicable large employers are generally those with 50 or more full-time (including equivalent) employees during the prior calendar year. 

For coverage to be affordable, an employee's required contribution for the lowest cost, self-only coverage option that provides minimum value must be less than a certain percentage of the employee's household income. For 2024, that percentage decreases to 8.39% (from 9.12% in 2023). This is the largest decrease since the ACA was enacted and may require employers to lower their employees' share of premiums. 

The IRS offers three optional safe harbor methods for determining whether the offered coverage is “affordable” because most employers do not know their employees' household incomes: the Form W-2, Rate of Pay and Federal Poverty Line safe harbors. The 2024 percentage (8.39%) will be used when applying the safe harbors. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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