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:
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W-2 wages
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Rate of pay
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Federal poverty level (FPL)
This percentage is adjusted annually by the IRS.