The ACA required contribution percentage is 10.22% for plan years beginning in 2027, up from 9.96% in 2026.
Employer coverage is treated as affordable if the employee’s share of the premium is no more than that share of household income. Coverage that costs more than the threshold is unaffordable, which opens the door to Marketplace premium tax credits instead.
| Plan year | Required contribution | On $60,000 of income |
|---|---|---|
| 2026 | 9.96% | $5,976 a year |
| 2027 | 10.22% | $6,132 a year |
Source: IRS Rev. Proc. 2025-25 and Rev. Proc. 2026-26
The TestHow the affordability test works
Take the employee’s annual share of the premium for the cheapest plan the employer offers, and compare it with the threshold percentage of household income. Below the line, the offer is affordable and the employee cannot claim a Marketplace subsidy. Above it, they can. Applicable large employers also face a penalty when an employee takes a subsidy because the offer failed this test.
Family CoverageFamily coverage is tested separately
Since 2023 the family’s affordability is measured against the cost of family coverage, not employee-only. That matters because employers commonly subsidise the worker heavily and the dependants barely at all. A household where the employee’s own coverage passes the test and family coverage fails it can leave the employee on the job plan while the spouse and children take subsidised Marketplace cover.
That fix is what ended the so-called family glitch, which had locked those households out entirely.
Next StepsWhat to do next
Employers should check their lowest-cost plan against the new 10.22% figure before the plan year starts, using one of the IRS safe harbours if household income is not known. Employees offered coverage should run both tests — employee-only and family — before assuming the Marketplace is closed to them.
More QuestionsPeople also ask
Is affordability based on gross or net pay?
On household income. Because employers cannot see that, the IRS allows safe harbours based on W-2 wages, rate of pay or the federal poverty line.
Does this apply to ICHRA offers?
ICHRA affordability uses the same percentage but compares the employer’s reimbursement against the lowest-cost Silver plan where the employee lives.
This page explains officially published figures. It is not an insurance quote and not an eligibility determination. Only HealthCare.gov, Medicare.gov, Social Security or the carrier can determine your eligibility and your actual price.