HR Professionals Magazine January 2016


January 2016 Issue Highlights


In the Spotlight: Susan R. Meisinger, SHRM-SCP, SPHR, JD


HR breaking newsIRS Announces 2016 ACA Affordability Percentage

The IRS ACA affordability contribution percentages were further increased for 2016. Under the ACA, the affordability of an employer’s plan may be assessed in the following three contexts:

  •  Shared responsibility penalty for applicable large employers. This refers to the pay or play rules or employer mandate;
  •  An exemption from the tax penalty imposed on individuals who fail to obtain health coverage. This refers to the individual mandate.
  •  The premium tax credit for low-income individuals to purchase health coverage through a Health Care Exchange.

The affordability percentage for the employer mandate and premium tax credit for 2016 is 9.66% under the employer mandate and premium tax credit eligibility rules.

For plan years beginning in 2016, employer- sponsored coverage will generally be considered affordable under both the pay or play rules and the premium tax credit eligibility rules if the employee’s required contribution for self-only coverage does not exceed 9.66 % of the employee’s household income for the year. But employers using an affordability safe harbor under the pay or play rules should continue using a contribution percentage of 9.5 % to measure their plan’s affordability.





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