2024 Affordability Percentage – Lowest Yet

2024 Affordability Percentage – Lowest Yet

In a recent Notice the IRS announced another decreased percentage that will be used to determine whether employees’ share of their 2024 premiums are considered affordable for purposes of the employer mandate. Applicable Large Employers, for the 2024 plan year, will need to apply the threshold of 8.39% (down from 9.12% for 2023) to any of three “safe harbors”:

•             W-2 wages

•             Rate of pay

•             Federal poverty level

Knowing what the affordability percentage is will help employers better prepare for health plan changes and contributions in order to better avoid penalties.