What is the affordability percentage under the employer mandate?

Under the ACA’s employer mandate, applicable large employers (ALEs) must offer full-time employees affordable, minimum value coverage or face potential penalties. For 2025, coverage is considered affordable if the employee’s required contribution for self-only coverage doesn’t exceed 9.02% of their income (up from 8.39% in 2024).

Since employers often don’t know household income, they can use one of three IRS-approved safe harbors:

  • W-2 wages

  • Rate of pay

  • Federal poverty level (FPL)

This percentage is adjusted annually by the IRS.

Employer Responsibilities