Benefits Buzz – September 2020

Affordability Percentages Will Increase for 2021

The IRS issued Revenue Procedure 2020-36 to index the contribution percentages in 2021 for determining affordability of an employer’s plan under the Affordable Care Act (ACA).

For plan years beginning in 2021, the ACA affordability contribution percentages increased slightly to:

  • 9.83% under the pay or play rules
  • 9.83% under the premium tax credit eligibility rules
  • 8.27% under an exemption from the individual mandate

Although the individual mandate penalty no longer applies, some individuals may still need to seek this Affordability Percentages Will Increase for 2021 exemption for other purposes, such as eligibility for catastrophic coverage.

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