Sarah Borders, CEBS October 4, 2021 2 min read

ACA Affordability Percentage Updated for 2022

Recently the IRS updated the affordability percentage to 9.61% for plan years that start on or after Jan 1, 2022. This percentage is used by applicable large employers (ALEs) to determine whether or not the employer’s coverage is considered affordable for that employee.

There are 3 affordability safe harbors an employer can use to determine whether or not coverage is “affordable” for a certain employee. The 3 safe harbor methods include:

1. Rate of Pay
2. W-2
3. Federal Poverty Level

Because the affordability safe harbor used will reflect which codes are entered on Lines 14 and 16 of each employee’s Form 1095-C, employers will need to calculate affordability using the adjusted percentage for 2022 plan years.



Sarah Borders, CEBS

Principal, Benefits Compliance Solutions. Sarah has spent the last 15 years in the employee benefits industry, has numerous designations and serves on NAHU’s Employer Working Group Subcommittee and is an active board member of Austin AHU. She recently stepped down as Vice President of Benefits Compliance at one of the nation's largest brokerage firms to start her own compliance consulting practice. Her designations include an active license with the Texas Department of Insurance, CEBS (Certified Employee Benefits Specialist), Certified Health Care Reform Professional, HIPAA certification and Health Care Service Associate. She holds an MBA from Texas A&M Corpus Christi and a BA from University of Incarnate Word. Her consulting firm, Benefits Compliance Solutions, partners with employers to identify unknown risks and avoid hundreds of thousands of dollars in fines and lawsuits from failure to comply with their healthplan obligations.