ACA Update: Affordability Percentage to Increase in 2015
Beginning in 2015, the Affordable Care Act (ACA) requires applicable large employers to offer affordable, minimum coverage to their full-time employees or be subject to a penalty. This rule is better known as the employer mandate, or the "play or play" rule. For coverage to be considered affordable, an employee's required contribution for self-only coverage cannot exceed a certain percentage of their annual household income. For plans beginning in 2014, the percentage used to determine affordability was 9.5 percent of an employee's annual household income. According to a bulletin released by the IRS in July, however, this percentage is set to increase to 9.56 percent for plan years beginning in 2015.