By Dawn Carlisle, JS Benefits Group
The IRS has officially released the 2027 Affordable Care Act (ACA) affordability percentage, and for the first time ever, the affordability threshold has exceeded 10%.
For plan years beginning in 2027, applicable large employers (ALEs) must ensure employee contributions for their lowest-cost, minimum-value, self-only health plan do not exceed 10.22% of an employee’s household income.
At JS Benefits Group, we help employers throughout Pennsylvania, New Jersey, Delaware, Maryland, and New York navigate ACA compliance while designing employee benefits strategies that reduce costs and improve employee retention.
Watch the 2027 ACA Affordability Video
<iframe width=”560″ height=”315″ src=”https://www.youtube.com/embed/p0bligDN4AE” title=”2027 ACA Affordability Threshold” frameborder=”0″ allowfullscreen></iframe>
📺 Watch on YouTube:
https://youtu.be/p0bligDN4AE
What Changed for 2027?
The IRS increased the affordability percentage to 10.22%, up from 9.96% in 2026.
This percentage determines whether an Applicable Large Employer (ALE) has offered affordable health coverage under the ACA employer mandate.
If you’re unsure whether your organization qualifies as an ALE or how these rules apply to your workforce, our Employee Benefits Consulting Services team can help evaluate your current strategy.
Which Health Plan Must Meet the Affordability Test?
The affordability test applies only to the employer’s:
- Lowest-cost medical plan
- Minimum-value plan
- Employee-only (self-only) coverage
It does not apply to dependent coverage.
Employers should review both affordability and overall plan competitiveness during renewal—not simply whether the plan passes IRS testing.
Learn more about our Employee Benefits Solutions designed to control healthcare costs while improving employee satisfaction.
The Three ACA Safe Harbors
The IRS permits employers to use three affordability safe harbors:
- Federal Poverty Level (FPL)
- Rate of Pay
- W-2 Wages
For calendar-year plans beginning in 2027, the Federal Poverty Level safe harbor maximum employee contribution is:
$135.92 per month
Choosing the correct safe harbor can significantly reduce ACA compliance risk.
2027 Employer Shared Responsibility Penalties
The IRS also increased employer penalties.
Section 4980H(a)
$3,780 per full-time employee
Section 4980H(b)
$5,670 per affected employee
These penalties reinforce why employers should regularly review both affordability and plan design—not simply renew the same health plan year after year.
The Mistake Many Employers Make
Many employers assume a higher affordability percentage means they should automatically charge employees more.
That isn’t what the IRS intended.
The affordability percentage simply establishes when penalties may apply.
It says nothing about:
- Recruiting
- Retention
- Employee satisfaction
- Healthcare affordability
- Workforce competitiveness
The strongest employers balance compliance with a long-term employee benefits strategy.
Calculate Your ACA Exposure
Before open enrollment, calculate your organization’s potential employer mandate penalties using our free tool.
👉 ACA Employer Mandate Penalty Calculator
Read the Complete 2027 ACA Affordability Guide
Want a deeper explanation of the IRS guidance?
👉 2027 ACA Affordability Threshold Guide
Reduce Healthcare Costs Without Reducing Benefits
ACA compliance is only one piece of an effective employee benefits strategy.
Our advisors help employers with:
- Level-funded health plans
- Self-funded health plans
- Cost containment strategies
- Employee advocacy
- ACA & ERISA compliance
- Employee Navigator implementation
- Corporate wellness
- Executive benefits
Explore our Group Health & Employee Benefits Services to learn how we help employers reduce costs while improving employee satisfaction.
Need a Second Opinion?
Every employer’s workforce is different.
Request a complimentary benefits analysis and let our consultants identify opportunities to reduce healthcare costs, improve compliance, and strengthen your employee benefits strategy.
👉 Request Your Free Benefits Analysis
