📈 2026 ACA Pay-or-Play Affordability Percentage Increases to 9.96% 💸
On July 18, 2025, the IRS released Revenue Procedure 2025-25, raising the ACA affordability threshold for employer-sponsored health coverage to 9.96% for 2026.
👉 Under the Affordable Care Act’s “pay-or-play” rules, large employers must offer affordable, minimum-value health coverage to full-time employees — or face potential penalties.
🧾 New for 2026:
If an employee’s share of the self-only premium for the lowest-cost plan is no more than 9.96% of their household income, the coverage is considered affordable.
📊 Here’s how the affordability percentage has changed over time:
- 2023: 9.12%
- 2024: 8.39%
- 2025: 9.02%
- 2026: 🔺 9.96% (highest ever!)
💡 Reminder: Employers can use one of three safe harbors — W-2, rate of pay, or federal poverty level — to assess affordability if household income isn’t known.
📣 With this increase, employers may have more room to raise employee premium contributions in 2026 while still staying compliant. Plan ahead!
📞 Questions or need help navigating?
Call us at (520) 721-4848
