This decreased threshold translates into higher employer contributions towards their employees’ health coverage plans.
Earlier this year the Biden administration passed the American Rescue Plan (ARP), which for now, and for the indefinite future, will drop the Affordable Care Act (ACA) affordability percentage for the 2022 tax year by 9.61%.
What Is The ACA Affordability Percentage?
The IRS affordability percentage helps employers establish health insurance contribution costs for their employees. If you offer health insurance to your ACA full-time employees and the contribution amount for self-only coverage is greater than 9.61% of their household income, you could be subject to Section 4980H(b) penalties from the IRS under the healthcare law’s Employer Mandate.
Under the ACA’s Employer Mandate, employers with 50 or more full-time employees and full-time equivalent employees, known as Applicable Large Employers (ALEs) must:
- Offer Minimum Essential Coverage (MEC) to at least 95% of their full-time employees (and their dependents) whereby such coverage meets Minimum Value (MV); and
- Ensure that the coverage for the full-time employee is affordable based on one of the IRS-approved methods for calculating affordability.
The 2022 Open Enrollment Period Began on November 1, 2021 In All States
It’s important to note that while consumers can enroll through mid-January, those that want health insurance that begins on January 1, 2022 must enroll by December 15, 2021.
Premiums, Insurer Participation, and Deductibles for 2022
- Overall, premiums are expected to drop in average by 3 percent for a 27-year-old plan. This builds on steady progress over time—with a 2 percent decline for 2021, 4 percent decline for 2020.
- Premium savings are far greater once enhanced subsidies from the American Rescue Plan Act (ARPA) are accounted for.
- ARPA subsidy enhancements are temporary but will continue for the 2022 plan year.
Please keep in mind that different areas have different Plans. A particular plan may not be available where you live. Call Insurance Pro at 407.847.7000.
Any Questions About ACA – Obamacare?
Contact us if you have questions about ACA-Obamacare or Medicare Advantage. Call us also to find out if you qualify for a $0 Mo.