ACA Play or Pay: Affordability Percentage for 2019

Connecticut Employment Law Update – May 2018
May 31, 2018
10 Tales from the Front
June 4, 2018

On May 21, 2018, the IRS announced that the affordability percentage under the Affordable Care Act’s play or pay rules will increase to 9.86% for 2019 plan years. This is an increase from 9.56% for 2018 plan years.

By way of background, the ACA’s employer shared responsibility provision – often called the employer mandate or “play or pay” – requires large employers to offer health coverage to their full-time employees or face a potential penalty. (Employers with fewer than 50 full-time and full-time equivalent employees are exempt.) Large employers can avoid the risk of any play or pay penalties by offering all full-time employees at least one group health plan option that meets two standards: it provides minimum value and it is affordable.

Minimum value means the plan’s share of total allowed costs is at least 60% and the plan provides substantial coverage of physician services and inpatient hospital services.

Affordable means the employee’s required contribution (payroll deduction) for self-only coverage, if elected, does not exceed a certain percentage of the employee’s income. The affordability percentage changes slightly each year based on the law’s indexing rule. The percentage is 9.56% for 2018 plan years and it will increase to 9.86% for 2019 plan years.

Get It All

ThinkHR customers can find a wealth of information about the ACA, including a complete guide to the play or pay rules, by logging on to Comply.

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