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ACA affordability safe harbors set for 2018 plan year

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in Office Management,Payroll Management

For the 2018 plan year, group plans are affordable if employees’ premiums don’t exceed 9.56% of their W-2, Box 1 income or their hourly rates of pay on the first day of the plan year (9.69% for the 2017 plan year).

For the federal poverty line safe harbor, benefits are affordable if employees don’t pay more than $96.72 a month ($12,140 federal poverty line ÷ 12 × 9.56%). Flip side: A full-time employee who earns up to $48,560 ($12,140 × 400%) may qualify for a premium tax credit if your group benefits aren’t affordable or don’t provide minimum value.

SIX-MONTH RULE: If you use the federal poverty line safe harbor, you may use federal poverty guidelines in effect six months prior to the start of your plan year. For 2017, the federal poverty line was $12,060.

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