On August 23, 2023, the IRS published Revenue Procedure 2023-29, which provides the employer contribution percentage requirements applicable for plan years beginning in calendar year 2024 and the 2024 premium tax credit (PTC) table.
The ACA’s employer-shared responsibility rules (also known as the “employer mandate”) require an employer to provide affordable, minimum-value coverage to its full-time employees. The IRS’ required contribution percentage is used to determine whether an employer-sponsored health plan offers an individual affordable coverage, and the affordability percentage is adjusted for inflation each year. In addition, the ACA also provides a refundable PTC, based on household income, to help individuals and families afford health insurance through insurance exchanges. The IRS provides the PTC percentage table for individuals to calculate their PTC.
In 2024, the ACA's affordability percentage will decrease significantly to 8.39% (down from 9.12% in 2023). For the employer mandate and affordability, this means that an employee’s required premium contribution toward single-only coverage under an employer-sponsored group health plan can be no more than 8.39% of the federal poverty line or of an employee’s W-2 income or rate of pay (depending on which of the three affordability safe harbors the employer is relying upon).
The 2024 PTC table used to determine an individual’s eligibility for PTCs is provided below:
The revenue procedure is effective for plan years beginning in calendar year 2024.
Employers should be mindful of the upcoming 2024 affordability percentages and make sure that the premium offerings for 2024 remain affordable for full-time employees to avoid any employer-shared responsibility penalties.
For further information, please download copies of our publications, ACA: Employer Mandate Penalties and Affordability and Cost-Share Contribution Models: A Guide for Employers.
IRS Revenue Procedure 2023-29 »