2018 ACA Affordability Percentage
The 2018 ACA Affordability Percentage is 9.56%.
Effective 2018-01-01Source: Rev. Proc. 2017-36 (IRS)Verified 2026-09-03
Required contribution percentageSource: Publication 974 (2018), Premium Tax Credit (PTC) (IRS)Verified 2026-09-03
Compared with 2017
| Item | 2017 | 2018 | Change |
|---|---|---|---|
| Required contribution percentage | 9.69% | 9.56% | -0.13% (-1.3%) |
Who it applies to
Individuals determining whether employer-sponsored minimum essential coverage is affordable under Internal Revenue Code § 36B
What changed this year, and why
The IRS set the ACA required contribution percentage at 9.56% for plan years beginning after December 31, 2017.
Common questions
- What is the ACA affordability percentage for 2018?
- The required contribution percentage for 2018 is 9.56%. This percentage is used to determine whether employer-sponsored health coverage is considered affordable for purposes of the premium tax credit under § 36B.
- When does the 9.56% rate take effect?
- It applies to plan years beginning after December 31, 2017.
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 2018, an employer's health plan is affordable if the employee's share of the annual premium for self-only coverage - called the employee required contribution - is no more than 9.56% of the tax family's household income. This self-only test applies even when the employee would actually enroll in family coverage covering a spouse or dependents. If the required contribution exceeds the 9.56% threshold, the offer is unaffordable and the employee (and potentially the tax family) may qualify for the premium tax credit on a qualified health plan. If the contribution is at or below 9.56%, the offer is treated as affordable and blocks the credit.
How to determine if the plan is affordable. Your em- ployer coverage generally is 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 9.56% of your tax family’s household income for 2018.
Publication 974 (2018), Premium Tax Credit (PTC) (IRS)
An affordable offer blocks the premium tax credit
Even when an employer offers coverage that qualifies as minimum essential coverage, the offer only blocks the premium tax credit if it also passes two additional tests: the coverage must be affordable and it must provide minimum value. If either test fails, the employee is not treated as eligible for an employer-sponsored plan and may receive the credit. The same two tests apply to tax family members offered coverage through the employee's employer. However, if an employee or family member actually enrolls in the employer's minimum essential coverage, that enrolled person cannot get the premium tax credit even if the coverage is unaffordable or fails to 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 (2018), Premium Tax Credit (PTC) (IRS)
The second test an employer plan has to fail
A plan meets the 60% rule only if an employee's expected cost-sharing - deductibles, co-pays, and co-insurance - under the plan is no more than 40% of the cost of the benefits. This percentage is based on actuarial principles using benefits provided to a standard population and is not based on what the employee actually pays for cost sharing.
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. A plan meets the 60% rule only if an employee’s expected cost-sharing (deductibles, co-pays, and co-insurance) under the plan is no more than 40% of the cost of the benefits.
Publication 974 (2018), Premium Tax Credit (PTC) (IRS)
A waiting period is not coverage you can use
A waiting period before employer coverage becomes effective is not treated as a month when the employee is eligible for employer coverage. During that month, the employee may receive the premium tax credit on a qualified health plan if otherwise eligible. However, if the employee could have enrolled in employer coverage that is minimum essential coverage, affordable, and provides minimum value, but did not enroll during the enrollment period, the employee cannot get the premium tax credit for the remainder of the plan year to which that enrollment period related.
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 (2018), Premium Tax Credit (PTC) (IRS)
Which plans are eligible employer-sponsored coverage
An eligible employer-sponsored plan is an employer-sponsored plan that also qualifies as minimum essential coverage. The category includes several kinds of employer arrangements: a group health plan or health insurance coverage offered by an employer in the small or large group market, a self-insured group health plan for employees, certain expatriate health plans for employees, and the Nonappropriated Fund Health Benefits Program of the Department of Defense. These plans may also include retiree or COBRA coverage. Employer-sponsored health coverage limited to excepted benefits - such as stand-alone vision or dental, workers' compensation, or disease-specific coverage - is not minimum essential coverage and therefore is not an eligible employer-sponsored plan.
Employer-sponsored plans that are MEC also are refer- red to as eligible employer-sponsored plans.
Publication 974 (2018), Premium Tax Credit (PTC) (IRS)
COBRA or retiree coverage from a former employer only counts against you while you are enrolled in it
Under the 2018 rules for the Premium Tax Credit in the United States, if your employment ends and your former employer offers you coverage such as COBRA or retiree insurance, that offer does not block you from getting the credit for other months. You are treated as eligible for the former employer's coverage only during the months you actually enroll in it. If you decline or never sign up, the coverage does not count against you, and you can still qualify for the credit based on your other circumstances. The same rule applies to a family member who could join the former employer's plan through a relationship to you. This prevents people from being locked out of the credit simply because an old employer's plan remains technically available to them after they leave.
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 (2018), Premium Tax Credit (PTC) (IRS)
Affordability is judged on your income estimate at enrollment, not what your return later shows
Affordability is tested at the moment you enroll, using the Marketplace's estimate of your household income at that time - not the income your tax return later shows. If the Marketplace found, based on your estimate, that your employer coverage would cost more than 9.56% of that estimated income and approved you for advance premium tax credit, you keep the premium tax credit when you file, even if your actual return-year income turns out low enough that your required contribution would come out under 9.56% after the fact. There are two narrow exceptions where the return-year income controls instead: if you did not keep the Marketplace updated with current income and contribution information at each annual re-enrollment, or if you gave the Marketplace incorrect contribution information through intentional or reckless disregard for the facts. Outside those exceptions, the enrollment-time determination is the one that governs.
Eligibility for employer coverage in this situation does not disqualify you from taking the PTC when you file your tax return, even if your required contri- bution for coverage was not more than 9.56% of the household income on your return. However, you will be treated as eligible for affordable employer coverage based on the household income on your tax return if: • You did not provide current information to the Market- place relating to your household income and the re- quired contribution for your employer coverage during each annual re-enrollment period, or • You provided incorrect information to the Marketplace about your required contribution with intentional or reckless disregard for the facts.
Publication 974 (2018), Premium Tax Credit (PTC) (IRS)
There is no line for the percentage itself - it enters your return as a multiplier on a worksheet
For 2018, the required contribution percentage is 9.56%. This percentage does not appear as a standalone line on your tax return. Instead, it enters your return as a multiplier on Worksheet N, which determines whether a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) is considered affordable. On Worksheet N, you enter the amount from Form 8962, line 3 (the premium for the second lowest cost silver plan) on line 1, then multiply line 1 by 0.0956 on line 2. The result is divided by 12.0 on line 4 to produce a monthly affordability threshold. If your QSEHRA permitted benefit exceeds that monthly amount, the employer coverage is considered affordable and you may not qualify for the premium tax credit for those months. The percentage itself has no line of its own; it exists only as the multiplier that turns the SLCSP premium into a dollar amount.
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 2018 or you changed employers during 2018. 1. Enter the amount from Form 8962, line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. 2. Multiply line 1 by 0.0956 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. 3. Enter the number of months you were provided the QSEHRA in 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. 4. Divide line 2 by 12.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
Publication 974 (2018), 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 for 2018, giving the Marketplace wrong information about your household income or required contribution for employer coverage on purpose or carelessly voids the safe harbor that would otherwise lock in your Premium Tax Credit eligibility based on your enrollment-time estimate. You provide information with intentional disregard if you know what you gave them is inaccurate. You provide information with reckless disregard if you make little or no effort to find out whether it is accurate and that lack of effort is substantially different from what a reasonable person would do. When either applies, the Marketplace can later treat you as eligible for affordable employer coverage based on the actual household income shown on your tax return, which can disqualify you from taking the credit.
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 (2018), 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 (2018), 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 MarketplaceCAUTION ! determines that your required contribution for employer coverage will be more than 9.56% 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.