AFFORDABILITY PERCENTAGES WILL DECREASE FOR 2020
OVERVIEW
On July 23, 2019, the Internal Revenue Service (IRS) issued Revenue Procedure 2019-29 to index the contribution percentages in 2020 for purposes of determining affordability of an employer’s plan under the Affordable Care Act (ACA). For plan years beginning in 2020, employer-sponsored coverage will be considered affordable if the employee’s required contribution for self-only coverage does not exceed:
9.78% of the employee’s household income for theyear, for purposes of both the pay or play rules andpremium tax credit eligibility; and
8.24% of the employee’s household income for theyear, for purposes of an individual mandate exemption(adjusted under separate guidance).
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