The Internal Revenue Service (IRS) issued Revenue Procedure 2018-34 to index the contribution percentages in 2019 for purposes of determining affordability of an employer’s plan under the Affordable Care Act (ACA).
Employer-sponsored coverage for the 2019 plan year will be considered affordable under the employer shared responsibility rules (“Employer Mandate”) if the employee’s required contribution for self-only coverage does not exceed 9.86 percent of the employee’s household income for the tax year.
The Employer Mandate of the Affordable Care Act (ACA) penalizes Applicable Large Employers (ALEs) who either do not offer coverage or do not offer coverage which meets minimum value and affordability standards. The tax penalties for the ALEs only apply if the full-time employee receives a subsidy for Marketplace coverage. Employees who are offered minimum value coverage that is affordable are not eligible for subsidies.