ACA Affordability Threshold Increases to 9.02% for 2025

For 2025, an employee’s health insurance cannot exceed 9.02% of their household income. This is up slightly from 2024's ACA Affordability threshold of 8.39%.

How does the 2025 ACA affordability requirements impact employers?

If your business employees 50 or more full-time equivalent (FTE) employees, you are required by the Affordable Care Act to provide "Minimum Essential Coverage." This coverage cannot cost more than 9.02% of an employees' household income. The IRS offers multiple methodologies for an employers to prove they've met ACA Affordability requirements (aka, "Safe Harbors"). Every year, employers file a 1094/1095-C to the IRS to confirm they've met these requirements.

‍How does the 2025 ACA affordability requirements impact employees?

ACA Affordability establishes the maximum amount that individuals must pay for their health insurance premiums. If you find yourself paying more than 9.02% of your household income on health insurance premiums, you may have the option of declining your employers plan, purchasing a plan on Healthcare.gov (or your state's health insurance exchange), and qualifying for Advanced Premium Tax Credits (aka, "Obama Care subsidies). APTCs lower your monthly premium costs to as little as $1 per month.

‍ACA Affordability and ICHRA

The ACA Affordability Requirements determine the minimum amount of funding an employer must provide their employees under an ICHRA. Curious how this new requirement impacts you? Our team can walk you through the regulation and make sure your ICHRA funding strategy is ACA-compliant.