{"id":3163,"date":"2023-08-31T12:13:23","date_gmt":"2023-08-31T17:13:23","guid":{"rendered":"https:\/\/www.bbrown.com\/?post_type=insight&#038;p=3163"},"modified":"2023-08-31T12:13:23","modified_gmt":"2023-08-31T17:13:23","slug":"2024-affordability-alert","status":"publish","type":"insight","link":"https:\/\/www.bbrown.com\/us\/insight\/2024-affordability-alert\/","title":{"rendered":"2024 Affordability Alert | Indexed Contribution Percentage for an Employer\u2019s Plan Under the ACA"},"content":{"rendered":"<div class=\"wpb-content-wrapper\"><p>[vc_row row_style=&#8221;page-hero&#8221; full_width=&#8221;stretch_row_content&#8221;][vc_column]\n\t<div class=\"hero hero--wrap    \">\n\n\t\t<div class=\"hero--background-image hero--background-image-blur\">\n\t\t\t<div class=\"hero--overlay\"><\/div>\n\t\t\t\t\t\t\t<div class=\"hero-background\" style=\"background: url(https:\/\/www.bbrown.com\/wp-content\/uploads\/2023\/08\/united-states-2361405_1920.jpg) center center no-repeat; background-size: cover;\"><\/div>\n\t\t\t\t\t<\/div>\n\n\t\t<div class=\"hero--container\">\n\t\t\t<div class=\"container\">\n\t\t\t\t<div class=\"hero--inner width-100\">\n\n\t\t\t\t\t\n  <div class='content-heading  100%  '>\n    <p class='text-white subheading'>Employee Benefits<\/p>\n    <h1 class='text-white    '>\n      2024 Affordability Alert | Indexed Contribution Percentage for an Employer\u2019s Plan Under the ACA\n    <\/h1>\n\t\n  <\/div>\t\t\t\t\t\n\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t<\/div>\n\n\t<\/div>\n\n\t\n[\/vc_column][\/vc_row][vc_row][vc_column width=&#8221;2\/3&#8243;]\n  <div class='content-heading  100% content-heading--ruled '>\n    \n    <h1 class='text-brand-dark-blue    h2'>\n      2024 Affordability Alert | Indexed Contribution Percentage for an Employer\u2019s Plan Under the ACA\n    <\/h1>\n\t\n  <\/div>[vc_column_text]On August 23, 2023, the IRS issued <a href=\"https:\/\/www.irs.gov\/pub\/irs-drop\/rp-23-29.pdf\" target=\"_blank\" rel=\"noopener\">Revenue Procedure 2023-29<\/a>, announcing the indexed contribution percentage applicable in 2024 for determining the affordability of an employer\u2019s plan under the Affordable Care Act (ACA).<\/p>\n<p>For plan years beginning in 2024, employer-sponsored coverage will be considered affordable for purposes of the employer shared responsibility penalties (ESRP) if the employee\u2019s required contribution for self-only coverage under the lowest-cost medical plan option that provides minimum value (MV) does not exceed:<\/p>\n<ul>\n<li>8.39% of the employee\u2019s household income for the year (a significant decrease from the affordability contribution percentage of 9.12% in 2023).<\/li>\n<\/ul>\n<p>The updated affordability percentages are effective for taxable and plan years beginning on or after January 1, 2024.<\/p>\n<p>Because employers will not know each employee\u2019s household income to determine whether the offer of coverage is affordable, optional safe harbors may be used. The applicable safe harbors include:<\/p>\n<ul>\n<li><strong> The Box 1 W-2 Safe Harbor:<\/strong> Under this safe harbor, the offer is affordable if the employee\u2019s annual contribution for the lowest-cost employee-only coverage option does not exceed the applicable percentage of the employee\u2019s Box 1 W-2 earnings.<\/li>\n<li><strong>The Rate of Pay Safe Harbor:<\/strong> This applies the percentage to the employee\u2019s base hourly rate of pay at 130 hours a month or the monthly salary of a salaried employee.<\/li>\n<li><strong>The Federal Poverty Level (FPL) Safe Harbor:<\/strong> This applies the affordability percentage to the mainland (or Hawaii\/Alaska, if applicable) federal poverty line that is in effect within six (6) months before the start of the plan year.\n<ul>\n<li>For plan years beginning between July 1, 2023, and December 31, 2023, the FPL safe harbor can be used for offers that require the employee to contribute no more than $110.81 per month ($14,580 \u00f7 12 X 9.12% = $110.81).<sup>1<\/sup><\/li>\n<li>For plan years beginning on or after January 1, 2024 (and until six months following the last date for which the 2023 FPL is effective), the FPL safe harbor can be used for offers that require the employee to contribute no more than $101.94 per month ($14,580 \u00f7 12 X 8.39% = $101.94).<sup>2<\/sup><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3>Affordability for Family Members<\/h3>\n<p>Under IRS final regulations implemented in October 2022, employer-sponsored coverage for certain spouses and dependents (i.e., family members) is considered affordable for premium tax credit purposes if the employee\u2019s annual cost of family coverage does not exceed 8.39% of the employee\u2019s household income. Family members may now receive a marketplace premium tax credit if an employee\u2019s cost for family coverage under an employer\u2019s health plan is considered \u201cunaffordable\u201d to the family members, even if the plan\u2019s employee-only coverage is considered affordable to the employee.<\/p>\n<p>As a reminder, if the plan\u2019s employee-only coverage for the lowest cost plan is considered affordable to the employee, but family coverage (e.g., employee + spouse coverage, employee + dependent children coverage) under the plan is considered unaffordable, the employer would not be subject to penalties for failure to offer affordable coverage to employees\u2019 family members under the ACA Employer Mandate so long as the Applicable Large Employer (ALE) is otherwise compliant under the ACA Employer Mandate rules.[\/vc_column_text]\t<div class='wpb_content_element text-left btn-container'>\n\t\t\t\t\t<a class='btn btn-brand-green  '\n\t\t\t\thref='https:\/\/www.bbrown.com\/wp-content\/uploads\/2023\/08\/2024-Affordability-Alert-Brown-Brown_WEB.pdf' target='_blank' data-toggle=''>\n\t\t\t\t<span class=\"btn-text-color--default\">Download PDF<\/span>\n\t\t\t<\/a>\n\t\t\t<\/div>\n[vc_column_text]<em><sup>1<\/sup>A different calculation applies with respect to employees residing in Alaska or Hawaii.<\/em><br \/>\n<em><sup>2<\/sup>A different calculation applies with respect to employees residing in Alaska or Hawaii.<\/em>[\/vc_column_text][\/vc_column][vc_column width=&#8221;1\/3&#8243;][vc_single_image image=&#8221;2348&#8243; alignment=&#8221;center&#8221; style=&#8221;vc_box_circle_2&#8243;][vc_separator border_width=&#8221;2&#8243; el_width=&#8221;60&#8243;][vc_column_text]<\/p>\n<h6 style=\"text-align: center;\">Regulatory and Legislative Strategy Group<\/h6>\n<p>[\/vc_column_text]\t<div class='wpb_content_element text-center btn-container'>\n\t\t\t\t\t<a class='btn btn-brand-dark-blue  '\n\t\t\t\thref='\/us\/contact\/contact-general\/' target='' data-toggle=''>\n\t\t\t\t<span class=\"btn-text-color--default\">Connect Now<\/span>\n\t\t\t<\/a>\n\t\t\t<\/div>\n[\/vc_column][\/vc_row]<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>[vc_row row_style=&#8221;page-hero&#8221; full_width=&#8221;stretch_row_content&#8221;][vc_column][\/vc_column][\/vc_row][vc_row][vc_column width=&#8221;2\/3&#8243;][vc_column_text]On August 23, 2023, the IRS issued Revenue Procedure 2023-29, announcing the indexed contribution percentage applicable in 2024 for determining the affordability of an employer\u2019s plan under [&hellip;]<\/p>\n","protected":false},"author":66,"featured_media":3165,"template":"","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"insight_category":[31,73],"class_list":["post-3163","insight","type-insight","status-publish","has-post-thumbnail","hentry","insight_category-employee-benefits","insight_category-regulatory-and-legislative-strategy"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.0 (Yoast SEO v27.0) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>2024 Affordability Alert | Indexed Contribution Percentage for an Employer\u2019s Plan Under the ACA - Brown &amp; Brown<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.bbrown.com\/us\/insight\/2024-affordability-alert\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"2024 Affordability Alert | Indexed Contribution Percentage for an Employer\u2019s Plan Under the ACA\" \/>\n<meta property=\"og:description\" content=\"[vc_row row_style=&#8221;page-hero&#8221; full_width=&#8221;stretch_row_content&#8221;][vc_column][\/vc_column][\/vc_row][vc_row][vc_column width=&#8221;2\/3&#8243;][vc_column_text]On August 23, 2023, the IRS issued Revenue Procedure 2023-29, announcing the indexed contribution percentage applicable in 2024 for determining the affordability of an employer\u2019s plan under [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.bbrown.com\/us\/insight\/2024-affordability-alert\/\" \/>\n<meta property=\"og:site_name\" content=\"Brown &amp; Brown\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.bbrown.com\/wp-content\/uploads\/2023\/08\/united-states-2361405_1920.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1920\" \/>\n\t<meta property=\"og:image:height\" content=\"1440\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.bbrown.com\/us\/insight\/2024-affordability-alert\/\",\"url\":\"https:\/\/www.bbrown.com\/us\/insight\/2024-affordability-alert\/\",\"name\":\"2024 Affordability Alert | Indexed Contribution Percentage for an Employer\u2019s Plan Under the ACA - Brown &amp; Brown\",\"isPartOf\":{\"@id\":\"https:\/\/www.bbrown.com\/us\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.bbrown.com\/us\/insight\/2024-affordability-alert\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.bbrown.com\/us\/insight\/2024-affordability-alert\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.bbrown.com\/wp-content\/uploads\/2023\/08\/united-states-2361405_1920.jpg\",\"datePublished\":\"2023-08-31T17:13:23+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/www.bbrown.com\/us\/insight\/2024-affordability-alert\/#breadcrumb\"},\"inLanguage\":\"us\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.bbrown.com\/us\/insight\/2024-affordability-alert\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"us\",\"@id\":\"https:\/\/www.bbrown.com\/us\/insight\/2024-affordability-alert\/#primaryimage\",\"url\":\"https:\/\/www.bbrown.com\/wp-content\/uploads\/2023\/08\/united-states-2361405_1920.jpg\",\"contentUrl\":\"https:\/\/www.bbrown.com\/wp-content\/uploads\/2023\/08\/united-states-2361405_1920.jpg\",\"width\":1920,\"height\":1440},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.bbrown.com\/us\/insight\/2024-affordability-alert\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.bbrown.com\/us\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Insights\",\"item\":\"https:\/\/www.bbrown.com\/us\/news-events\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"2024 Affordability Alert | Indexed Contribution Percentage for an Employer\u2019s Plan Under the ACA\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.bbrown.com\/us\/#website\",\"url\":\"https:\/\/www.bbrown.com\/us\/\",\"name\":\"Brown &amp; Brown\",\"description\":\"\",\"publisher\":{\"@id\":\"https:\/\/www.bbrown.com\/us\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.bbrown.com\/us\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"us\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.bbrown.com\/us\/#organization\",\"name\":\"Brown &amp; Brown\",\"url\":\"https:\/\/www.bbrown.com\/us\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"us\",\"@id\":\"https:\/\/www.bbrown.com\/us\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.bbrown.com\/wp-content\/uploads\/2021\/12\/cropped-BBRetail002-RGBrevs.png\",\"contentUrl\":\"https:\/\/www.bbrown.com\/wp-content\/uploads\/2021\/12\/cropped-BBRetail002-RGBrevs.png\",\"width\":1000,\"height\":136,\"caption\":\"Brown &amp; Brown\"},\"image\":{\"@id\":\"https:\/\/www.bbrown.com\/us\/#\/schema\/logo\/image\/\"}}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"2024 Affordability Alert | Indexed Contribution Percentage for an Employer\u2019s Plan Under the ACA - Brown &amp; Brown","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.bbrown.com\/us\/insight\/2024-affordability-alert\/","og_locale":"en_US","og_type":"article","og_title":"2024 Affordability Alert | Indexed Contribution Percentage for an Employer\u2019s Plan Under the ACA","og_description":"[vc_row row_style=&#8221;page-hero&#8221; full_width=&#8221;stretch_row_content&#8221;][vc_column][\/vc_column][\/vc_row][vc_row][vc_column width=&#8221;2\/3&#8243;][vc_column_text]On August 23, 2023, the IRS issued Revenue Procedure 2023-29, announcing the indexed contribution percentage applicable in 2024 for determining the affordability of an employer\u2019s plan under [&hellip;]","og_url":"https:\/\/www.bbrown.com\/us\/insight\/2024-affordability-alert\/","og_site_name":"Brown &amp; Brown","og_image":[{"width":1920,"height":1440,"url":"https:\/\/www.bbrown.com\/wp-content\/uploads\/2023\/08\/united-states-2361405_1920.jpg","type":"image\/jpeg"}],"twitter_card":"summary_large_image","twitter_misc":{"Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.bbrown.com\/us\/insight\/2024-affordability-alert\/","url":"https:\/\/www.bbrown.com\/us\/insight\/2024-affordability-alert\/","name":"2024 Affordability Alert | Indexed Contribution Percentage for an Employer\u2019s Plan Under the ACA - Brown &amp; Brown","isPartOf":{"@id":"https:\/\/www.bbrown.com\/us\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.bbrown.com\/us\/insight\/2024-affordability-alert\/#primaryimage"},"image":{"@id":"https:\/\/www.bbrown.com\/us\/insight\/2024-affordability-alert\/#primaryimage"},"thumbnailUrl":"https:\/\/www.bbrown.com\/wp-content\/uploads\/2023\/08\/united-states-2361405_1920.jpg","datePublished":"2023-08-31T17:13:23+00:00","breadcrumb":{"@id":"https:\/\/www.bbrown.com\/us\/insight\/2024-affordability-alert\/#breadcrumb"},"inLanguage":"us","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.bbrown.com\/us\/insight\/2024-affordability-alert\/"]}]},{"@type":"ImageObject","inLanguage":"us","@id":"https:\/\/www.bbrown.com\/us\/insight\/2024-affordability-alert\/#primaryimage","url":"https:\/\/www.bbrown.com\/wp-content\/uploads\/2023\/08\/united-states-2361405_1920.jpg","contentUrl":"https:\/\/www.bbrown.com\/wp-content\/uploads\/2023\/08\/united-states-2361405_1920.jpg","width":1920,"height":1440},{"@type":"BreadcrumbList","@id":"https:\/\/www.bbrown.com\/us\/insight\/2024-affordability-alert\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.bbrown.com\/us\/"},{"@type":"ListItem","position":2,"name":"Insights","item":"https:\/\/www.bbrown.com\/us\/news-events\/"},{"@type":"ListItem","position":3,"name":"2024 Affordability Alert | Indexed Contribution Percentage for an Employer\u2019s Plan Under the ACA"}]},{"@type":"WebSite","@id":"https:\/\/www.bbrown.com\/us\/#website","url":"https:\/\/www.bbrown.com\/us\/","name":"Brown &amp; Brown","description":"","publisher":{"@id":"https:\/\/www.bbrown.com\/us\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.bbrown.com\/us\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"us"},{"@type":"Organization","@id":"https:\/\/www.bbrown.com\/us\/#organization","name":"Brown &amp; Brown","url":"https:\/\/www.bbrown.com\/us\/","logo":{"@type":"ImageObject","inLanguage":"us","@id":"https:\/\/www.bbrown.com\/us\/#\/schema\/logo\/image\/","url":"https:\/\/www.bbrown.com\/wp-content\/uploads\/2021\/12\/cropped-BBRetail002-RGBrevs.png","contentUrl":"https:\/\/www.bbrown.com\/wp-content\/uploads\/2021\/12\/cropped-BBRetail002-RGBrevs.png","width":1000,"height":136,"caption":"Brown &amp; Brown"},"image":{"@id":"https:\/\/www.bbrown.com\/us\/#\/schema\/logo\/image\/"}}]}},"_links":{"self":[{"href":"https:\/\/www.bbrown.com\/us\/wp-json\/wp\/v2\/insight\/3163","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bbrown.com\/us\/wp-json\/wp\/v2\/insight"}],"about":[{"href":"https:\/\/www.bbrown.com\/us\/wp-json\/wp\/v2\/types\/insight"}],"author":[{"embeddable":true,"href":"https:\/\/www.bbrown.com\/us\/wp-json\/wp\/v2\/users\/66"}],"version-history":[{"count":0,"href":"https:\/\/www.bbrown.com\/us\/wp-json\/wp\/v2\/insight\/3163\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bbrown.com\/us\/wp-json\/wp\/v2\/media\/3165"}],"wp:attachment":[{"href":"https:\/\/www.bbrown.com\/us\/wp-json\/wp\/v2\/media?parent=3163"}],"wp:term":[{"taxonomy":"insight_category","embeddable":true,"href":"https:\/\/www.bbrown.com\/us\/wp-json\/wp\/v2\/insight_category?post=3163"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}