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ARTICLE · 22 FEBRUARY 2024

UPDATE: Planning For Open Enrollment? Note The ACA Affordability Threshold Drop

Bass, Berry & Sims PLC
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On August 23, 2023, the Internal Revenue Service issued Rev. Proc. 2023-29, announcing that the Affordable Care Act (ACA) affordability threshold will be 8.39% for plan years beginning in 2024...

United StatesEmployment and HR
Susan K. Bilbro
Susan K. Bilbro
Kimia Olivia Movahed
Kimia Olivia Movahed

This post was updated on February 6, 2024, to reflect the 2024 Federal Poverty Level announced in January 2024.

On August 23, 2023, the Internal Revenue Service issued Rev. Proc. 2023-29, announcing that the Affordable Care Act (ACA) affordability threshold will be 8.39% for plan years beginning in 2024, a substantial decrease from the 9.12% affordability threshold set for plan year 2023. This marks the largest change yet in the affordability thresholds year-over-year. The affordability threshold is used to determine whether employer-sponsored health coverage is affordable for purposes of the ACA's employer-shared responsibility provisions.

Since 2014, the ACA regulations have provided that coverage is considered affordable if the employee premium for the lowest, self-only coverage option does not exceed a certain percentage of an employee's household income. That threshold percentage has been adjusted each year since 2014 but has always remained above 9% until

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