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ACA Affordability Calculator
Use our ACA affordability calculator to determine whether the health insurance coverage that you (ALE) offered to your employees meets the affordability standards under the ACA.
How does ACA Affordability Calculator work?
Acawise supports affordability calculations for multiple tax years.
Select the coverage year, enter the employee’s pay type, and your employee’s monthly contribution to the health plan.
ACAwise will calculate whether the percentage of employee contribution from the household income to the health plan is affordable or not!
1 Plan Year
Select the coverage year that you want to calculate the affordability for
Frequently Asked Questions about ACA Affordability Calculator
Q. Why is ACA affordability important for employers?
Employers subject to the ACA's Employer Shared Responsibility provisions (Applicable Large Employers) must offer affordable coverage to avoid penalties under Section 4980H(b). Affordable coverage ensures employees can access health insurance without excessive financial burden.
Note:
The 4980H(b) penalty is an ACA employer mandate penalty that applies when an employer offers health coverage, but the coverage is either unaffordable or fails to meet minimum value standards. To learn more about the penalties, click here.
Q. What is the ACA affordability percentage for employer-sponsored health coverage for the 2024 tax year?
For the 2024 tax year, the ACA affordability percentage for employer-sponsored health coverage is set at 8.39% of an employee’s household income, based on the federal poverty line. This percentage will increase to 9.02% for the 2025 tax year.
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