Updated guidelines set the 2025 FPL at $15,650 (up from $15,060 in 2024) for a person living in the mainland US, $17,990 in Hawaii, and $19,550 in Alaska.
Applies To:
Applicable large employers (ALEs with 50 or more full-time and equivalents, or FTEs) with a fully insured, level-funded, or self-funded group medical plan or an ICHRA.
Go Deeper:
There are three affordability safe harbors an applicable large employer (ALE) can rely upon to determine whether coverage is “affordable” for an employee. The three safe harbors include:
- Federal Poverty Level (FPL)
- Rate of Pay
- W-2
The FPL safe harbor is the easiest of the three to apply because the employer only has to do one calculation, which, in this case, does not depend on employees' actual wages.
The FPL safe harbor says the employer’s lowest cost single plan providing minimum value (MV) is FPL affordable if the employee’s portion does not exceed 9.02% (for 2025) of whatever FPL is in effect in any of the 6 months prior to the start of the plan year. Since the new year’s FPL is published after January 1 but before February 1, the 2024 FPL must be used for calendar year plans but the new 2025 FPL can be used for all 2025 non-calendar year plans.
- Calendar Year 2025 Plan: 2024 FPL ($15,060, $17,310 HI, or $18,810 AK) × 9.02% ÷ 12 = $113.20/mo, or $130.11/mo in Hawaii, or $141.38/mo in Alaska
- Non-Calendar Year 2025 Plan: 2025 FPL ($15,650, $17,990 HI, or $19,550 AK) × 9.02% ÷ 12 = $117.63/mo, or $135.22/mo in Hawaii, or $146.95/mo in Alaska
For ALEs who like to know in advance that their coverage is affordable the entire year no matter what employees earn, asking employees to pay no more than the FPL targets above for the lowest-cost single MV plan is a fail-safe way to go.
For ALEs wanting to take advantage of simplified reporting under the “Qualifying Offer Method,” one condition is that the offer must be mainland FPL affordable the entire calendar year, so the FPL thresholds for Hawaii and Alaska are too high to be “qualifying offers.” As a reminder, a qualifying offer can be reported on the 1095-C using 1A in line 14 and leaving lines 15 and 16 blank those months, which means there is only one row of data to audit later instead of three rows to audit.

COMMENTS