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Individual and Employer ACA Mandate Update

Posted on May 30th, 2017

Unless or until the Affordable Care Act (ACA) is repealed, the Individual and Employer Mandates remain intact, and earlier this month the Internal Revenue Service (IRS) issued some regulatory guidance pertaining to the two mandates for 2018.

For the Employer Mandate, coverage will be considered affordable if employees have to pay no more than 9.56% of their household income towards the cost of single-only coverage. Most employers don’t know the household income of employees so they can base affordability relative to an employee’s W-2 wages, monthly rate of pay, or relative to the federal poverty level (FPL). This is the first time the affordability percentage will go down. In 2017, the affordability percentage is 9.69%.

For the Individual Mandate, an exemption to the penalty will apply if a person has to pay more than 8.05% of their household income towards the lowest priced Bronze plan on the Exchange (after any applicable premium tax credit) or available through an employer. In 2017, this percentage is 8.16%. 

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