Today’s update reviews the Affordable Care Act’s (ACA) Affordability testing level for 2018. Applicable Large Employers (employers with 50 or more Full-Time Equivalent employees) are essentially required to offer health insurance coverage that meets certain standards otherwise they could face a Shared Responsibility Penalty if one or more of their employees receives a subsidy for health insurance coverage at a health insurance marketplace.
One of the standards for offering coverage is that employees are required to be offered coverage that is Affordable as defined by the ACA. For 2018, the Affordability Safe Harbor is defined as not exceeding 9.56% of the employees’ wages (when using the W-2 Safe Harbor or the Rate of Pay Safe Harbor) or of the Federal Poverty Level. Please note that this percentage is lower than the percentage in 2017.
Please review this document which summarizes the ACA’s Shared Responsibility penalties and Affordability calculation methods.
- you have any questions about this process, please do not hesitate to contact your Account Manager at EBS. Please note that EBS is sharing this information to assist you with your compliance planning. We recommend that you contact your legal counsel with specific questions relating to this law, and how it might affect individuals covered under your plan.
Ellen E. McPherson
Employee Benefits Solution