2017 ACA Affordability Percentage
The 2017 ACA Affordability Percentage is 9.69%.
Effective 2017-01-01Source: Rev. Proc. 2016-24 (IRS)Verified 2026-09-02
Required contribution percentageSource: Publication 974 (2017), Premium Tax Credit (PTC) (IRS)Verified 2026-09-02
Compared with 2016
| Item | 2016 | 2017 | Change |
|---|---|---|---|
| Required contribution percentage | 9.66% | 9.69% | +0.03% (+0.3%) |
Who it applies to
Employers offering health coverage and individuals determining eligibility for the premium tax credit under IRC § 36B.
What changed this year, and why
For 2017, the IRS set the ACA required contribution percentage at 9.69%, as published in Rev. Proc. 2016-24. This percentage is used under IRC § 36B to determine whether employer-sponsored minimum essential coverage is considered affordable for premium tax credit eligibility. It applies for plan years beginning after December 31, 2016.
Common questions
- What is the required contribution percentage used for?
- Under IRC § 36B, the required contribution percentage helps determine whether employer-sponsored minimum essential coverage is affordable. If an employee's share of the premium for self-only coverage exceeds 9.69% of household income, the coverage is not considered affordable and the employee may be eligible for a premium tax credit.
- When does the 9.69% percentage take effect?
- The 9.69% required contribution percentage applies for plan years beginning after December 31, 2016.
Every amount on this page is a published figure rather than yours. The Affordable employer coverage calculator takes the number you enter and works it out against them, showing which published figure it used.
The share of household income that makes an offer affordable
For 2017, employer coverage counts as affordable when the employee's share of the annual premium for self-only coverage - the employee required contribution - does not exceed 9.69% of the tax family's household income. The calculation always uses the cost of self-only coverage, even when the employee would actually enroll in a family plan covering a spouse or dependents. If the employee's share stays at or below 9.69%, the offer is treated as affordable for the employee and for every member of the tax family, regardless of the actual cost to cover them. There is an important caveat: if the employee supplied accurate information about employer coverage to the Marketplace and the Marketplace nonetheless determined the individual eligible for advance premium tax credits in a qualified health plan, the employer coverage is not treated as affordable for that person for that year. That Marketplace determination overrides the normal 9.69% calculation.
How to determine if the plan is affordable. Your em- ployer coverage is generally considered affordable for you and for a family member if your share of the annual cost for self-only coverage, which is sometimes referred to as the employee required contribution, is not more than 9.69% of your tax family’s household income for 2017.
Publication 974 (2017), Premium Tax Credit (PTC) (IRS)
An affordable offer blocks the premium tax credit
Even when an employer's plan qualifies as minimum essential coverage, an offer of that plan blocks the premium tax credit only if it also satisfies two further tests: it must be affordable, and it must provide minimum value. Both conditions have to be met for the employee. If the employee's offer fails either test, the employee remains eligible for the premium tax credit on a qualified health plan. For other members of the tax family, the rule is stricter: a family member can be barred from the credit only if the coverage was minimum essential coverage, was affordable, and provided minimum value for the employee. There is a separate trap for anyone who actually enrolls in employer coverage that is minimum essential coverage - once enrolled, that individual cannot receive the premium tax credit, even if the employer plan turned out to be unaffordable or did not provide minimum value.
Affordability and minimum value. Even if you had the opportunity to enroll in coverage offered by your em- ployer that qualifies as MEC, you are considered eligible for an employer-sponsored plan (and cannot get the PTC for your coverage in a qualified health plan) only if the em- ployer-sponsored coverage is affordable (defined later) and the coverage provides minimum value (defined later).
Publication 974 (2017), Premium Tax Credit (PTC) (IRS)
The second test an employer plan has to fail
An employer-sponsored plan provides minimum value only if it pays at least 60% of the total allowed costs of benefits for a standard population and provides substantial coverage of inpatient hospitalization services and physician services. Both conditions must be satisfied. The 60% calculation uses actuarial principles applied to benefits provided to a standard population, not what any particular employee actually pays in cost-sharing during the year. If a plan fails either the 60% test or the hospital and physician coverage requirement, it does not provide minimum value. When a plan does not provide minimum value, an offer of that plan cannot block the premium tax credit even if the coverage is affordable and qualifies as minimum essential coverage.
How to determine if a plan provides minimum value. An employer-sponsored plan provides minimum value only if the plan pays at least 60% of the total allowed costs of benefits for a standard population and provides sub- stantial coverage of inpatient hospitalization services and physician services.
Publication 974 (2017), Premium Tax Credit (PTC) (IRS)
A waiting period is not coverage you can use
During months when an employee cannot actually receive benefits under employer coverage - for example, while serving a waiting period before the plan becomes effective - the employee is not treated as eligible for that employer coverage. This means the employee can still receive the premium tax credit for a qualified health plan, provided other eligibility rules are met. The waiting period itself does not count as an offer that blocks the credit. However, if the employee could have enrolled during a prior enrollment period in employer coverage that was minimum essential coverage, affordable, and provided minimum value, and chose not to enroll, the credit is denied for the rest of the plan year tied to that enrollment period. Only when a new plan year begins, or when a fresh enrollment opportunity arises, can the premium tax credit become available again.
Waiting periods and other periods without access to benefits. You are not considered eligible for employer coverage, and can get the PTC for your coverage in a qualified health plan if you are otherwise eligible, for a month when you cannot receive benefits under the em- ployer coverage (for example, you are in a waiting period before the employer coverage becomes effective).
Publication 974 (2017), Premium Tax Credit (PTC) (IRS)
Which plans are eligible employer-sponsored coverage
An eligible employer-sponsored plan is an employer-sponsored plan that qualifies as minimum essential coverage. The publication identifies four categories that count: a group health plan offered in the group market, a self-insured group health plan for employees, coverage under certain expatriate health plans for employees, and the Nonappropriated Fund Health Benefits Program of the Department of Defense. These employer-sponsored plans may also include retiree or COBRA coverage. When an employer-sponsored plan meets the minimum essential coverage standard, it is referred to as an eligible employer-sponsored plan. Employer-sponsored health coverage that is limited to excepted benefits - such as stand-alone vision and dental plans, workers' compensation, or disease-specific coverage - does not qualify as minimum essential coverage and therefore is not an eligible employer-sponsored plan.
Employer-sponsored plans that are MEC are also refer- red to as eligible employer-sponsored plans.
Publication 974 (2017), Premium Tax Credit (PTC) (IRS)
COBRA or retiree coverage from a former employer only counts against you while you are enrolled in it
In the United States for 2017, if your employment ends and your former employer offers you continuation coverage such as COBRA or retiree health coverage, that offer does not count against your eligibility for the Premium Tax Credit (PTC) unless you actually enroll in it. You are treated as eligible for the former employer's coverage only for the months during which you are enrolled. If you decline the COBRA or retiree coverage, you are not considered eligible for it, so it does not bar you from claiming the PTC for those months. The same rule applies to someone who could enroll in the former employer's plan because of a relationship to the former employee, such as a spouse or dependent.
Coverage after employment ends. If your employ- ment with an employer ends and you are offered employer coverage by your former employer (for example, COBRA or retiree coverage), you are considered eligible for that employer coverage for PTC purposes only for the months that you are enrolled in the employer coverage.
Publication 974 (2017), Premium Tax Credit (PTC) (IRS)
Affordability is judged on your income estimate at enrollment, not what your return later shows
In the United States, whether employer coverage is considered affordable for purposes of the premium tax credit is fixed at the moment you enroll in a Marketplace plan, not recalculated later when you file your return. The Marketplace looks at the household income it estimates you will have for the year and compares your required contribution for employer coverage against that estimate. If, at enrollment, the Marketplace concludes your employer coverage will cost more than 9.69% of your estimated household income and therefore allows advance premium tax credits for your qualified health plan, that affordability determination stands even if the income shown on your actual tax return turns out to be different. In other words, a later change in your reported income does not retroactively make the employer coverage affordable or unaffordable for the months you were enrolled in the Marketplace plan.
Determining affordability at the time of enrollment. Your employer coverage is not considered affordable, if, when you enroll in a qualified health plan, the Marketplace determines that your required contribution for employer coverage will be more than 9.69% of what the Market- place estimates will be your household income and there- fore that you are eligible for APTC for coverage in the qualified health plan.
Publication 974 (2017), Premium Tax Credit (PTC) (IRS)
There is no line for the percentage itself - it enters your return as a multiplier on a worksheet
In the United States, the 2017 required contribution percentage of 9.69% does not appear as a separate line on your tax return. Instead, it enters your calculation as a multiplier on Worksheet N, the worksheet used to determine whether a qualified small employer health reimbursement arrangement (QSEHRA) is considered affordable. On that worksheet, you take the amount from Form 8962, line 3, and multiply it by 0.0969, which is the decimal form of the 9.69% rate. The resulting annual figure is then used in subsequent worksheet steps to produce a monthly amount that is compared against the self-only permitted benefit your employer made available to you. Because the percentage is embedded in the worksheet's arithmetic rather than reported as its own entry, you will not see a line on Form 8962 labeled with the percentage itself; the rate only surfaces through this multiplication step inside Worksheet N.
Worksheet N. Worksheet To Determine if the QSEHRA is Considered Affordable Keep for Your Records Note. See Special instructions for Worksheet N if your SLCSP premium was not the same for all months of 2017 or you changed employers during 2017. 1. Enter the amount from Form 8962, line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. 2. Multiply line 1 by 0.0969 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
Publication 974 (2017), Premium Tax Credit (PTC) (IRS)
Give the Marketplace bad numbers on purpose or carelessly, and the safe harbor does not protect you
In the United States, the special rule that protects you from having to repay advance premium tax credits when your income changes at year end depends on your having given the Marketplace accurate information. If you provide incorrect information to the Marketplace about your household income or the required contribution for your employer coverage, and you do so with intentional or reckless disregard for the facts, the protection does not apply. You act with intentional disregard when you know the information you give is inaccurate. You act with reckless disregard when you make little or no effort to check whether the information is accurate and that lack of effort is substantially different from what a reasonable person would do. In either case, even if your actual return shows you would have been eligible for the credit under the income-based repayment caps, the safe harbor is lost and the ordinary repayment limits apply instead.
You provided incorrect information to the Marketplace about your required contribution with intentional or reckless disregard for the facts. You provide information with intentional disregard for the facts if you know that the information provided is inac- curate. You provide information with a reckless disregard for the facts if you make little or no effort to determine whether the information provided is accurate and your lack of effort to provide accurate information is substan- tially different from what a reasonable person would do under the circumstances.
Publication 974 (2017), Premium Tax Credit (PTC) (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Publication 974 (2017), Premium Tax Credit (PTC) (IRS)
- Required contribution percentage
Your employer coverage is not considered affordable, if, when you enroll in a qualified health plan, the Marketplace determines that your required contribution for employer coverage will be more than 9.69% of what the Market- place estimates will be your household income and there- fore that you are eligible for APTC for coverage in the qualified health plan.