Employers can meet ACA affordability by ensuring self-only coverage costs no more than 9.02% of an employee’s hourly rate × 130 hours or their monthly salary.
Employer Responsibilities
What is the W-2 safe harbor and how does it work?
Employers using the W-2 safe harbor must ensure employee-only coverage costs no more than 9.02% of W-2 Box 1 wages to meet ACA affordability requirements.
What is the affordability percentage under the employer mandate?
For 2025, employee-only coverage is affordable if the cost doesn’t exceed 9.02% of income. Employers can use IRS safe harbors to calculate affordability and avoid penalties.