Regulatory Updates
Regulatory Updates provide quick access to employee benefit regulations, rulings and other guidance released by governmental agencies in the U.S. and Canada.
New updates to this page may be included in Today’s Headlines which is emailed to International Foundation members each business day. Inquiries regarding these updates should be directed to the Benefits Knowledge Center at the International Foundation at (888) 334-3327, option 5 or [email protected].
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IRS Updates Health Coverage Affordability Calculation for 2024
Aug 24, 2023, 05:00
by
Tyler Lloyd
The Internal Revenue Service (IRS) has issued Revenue Procedure 2023-29
providing the indexing adjustment for the required contribution
percentage. For plan years beginning in 2024, the required contribution
percentage is 8.39%, down from 9.12% in 2023.
The
affordability calculation can determine whether an individual can
afford employer-sponsored health coverage and affect whether the
individual would be eligible for a premium tax credit on the health
insurance exchanges. This could affect employers that do not use a safe
harbor method to determine whether the coverage they offer is affordable
to employees.
For plan years beginning in
2024, employer-provided coverage is considered affordable for an
employee if the employee required contribution is no more than 8.39% of
that employee’s household income. Because applicable large employers
generally do not know their employees’ household incomes, there are
three safe harbor methods for calculating affordability.