2021 ACA Affordability Percentage
The 2021 ACA Affordability Percentage is 9.83%.
Effective 2021-01-01Source: Rev. Proc. 2020-36 (IRS)Verified 2026-08-30
Required contribution percentageSource: Publication 974 (2021), Premium Tax Credit (PTC) (IRS)Verified 2026-08-30
Compared with 2020
| Item | 2020 | 2021 | Change |
|---|---|---|---|
| Required contribution percentage | 9.78% | 9.83% | +0.05% (+0.5%) |
Who it applies to
Employers offering health coverage and individuals determining eligibility for the premium tax credit under the Affordable Care Act for plan years beginning in 2021.
What changed this year, and why
The IRS published the 2021 ACA affordability percentage under Section 36B. For plan years beginning after December 31, 2020, the required contribution percentage is 9.83%, up from 9.78% in 2020. This percentage is used to determine whether employer-sponsored minimum essential coverage is considered affordable: if an employee's required contribution for self-only coverage exceeds 9.83% of household income, the coverage is not affordable and the employee may qualify for a premium tax credit through the Health Insurance Marketplace.
Common questions
- What is the ACA affordability percentage for 2021?
- The required contribution percentage for 2021 is 9.83%. It applies to plan years beginning after December 31, 2020.
- What does this percentage determine?
- It sets the threshold for whether employer-sponsored health coverage is considered affordable. If an employee must pay more than 9.83% of household income for self-only coverage, the coverage is unaffordable and the employee may be eligible for a premium tax credit.
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 2021, an employer plan is affordable if the employee's share of the annual premium for self-only coverage (the "employee required contribution") is no more than 9.83% of the tax family's household income. This self-only cost is used for the affordability test even when the employee would actually enroll in family coverage covering a spouse or dependents. If the employee's required contribution exceeds 9.83% of household income, the offer is unaffordable and the employee (and typically the tax family) may qualify for the premium tax credit on a qualified health plan. Certain exceptions apply - for example, if the employee gave accurate information about the employer offer to the Marketplace and the Marketplace determined the individual was eligible for advance payments of the premium tax credit, the coverage is treated as not affordable regardless of the 9.83% 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 9.83% of your tax family’s household income for 2021.
Publication 974 (2021), Premium Tax Credit (PTC) (IRS)
An affordable offer blocks the premium tax credit
For 2021, an offer of employer-sponsored coverage blocks the premium tax credit only when it meets two tests: affordability and minimum value. Even if you had the chance to enroll in employer coverage that qualifies as minimum essential coverage, you are treated as eligible for that employer plan - and therefore ineligible for the premium tax credit on a qualified health plan - only if the coverage is affordable and provides minimum value. If either condition fails, you may qualify for the credit. Family members may also be blocked from the credit for months they could have enrolled in your employer coverage, but only if that coverage was both affordable and provided minimum value for you. However, if you or a family member actually enrolls in the employer coverage that qualifies as minimum essential coverage, the enrolled person cannot get the premium tax credit even if the coverage fails the affordability or minimum value tests. Enrollment in the employer plan itself disqualifies the individual from the credit regardless of whether the offer would have passed those tests.
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 (2021), Premium Tax Credit (PTC) (IRS)
The second test an employer plan has to fail
An employer-sponsored plan must satisfy two tests to block premium tax credit eligibility: it must be affordable and it must provide minimum value. Minimum value is a separate test from affordability. Even if a plan fails the affordability test (meaning the employee's required contribution exceeds 9.83% of household income), the plan might still provide minimum value. To qualify as providing minimum value, an employer plan must pay at least 60% of the total allowed costs of benefits for a standard population and must provide substantial coverage of inpatient hospitalization services and physician services. If a plan provides minimum value but is not affordable, the employee may still qualify for the premium tax credit. However, if a plan is both affordable and provides minimum value, the employee and tax family members are considered eligible for employer coverage and cannot receive premium tax credits for qualified health plan coverage.
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 (2021), Premium Tax Credit (PTC) (IRS)
A waiting period is not coverage you can use
A waiting period is a time before employer coverage becomes effective. During a waiting period, you are not considered eligible for employer coverage and can receive the premium tax credit for your qualified health plan coverage if you are otherwise eligible. This means that even though you may have an offer of employer-sponsored coverage, you can still qualify for the credit during months when you cannot actually receive benefits under the employer plan. However, if you could have enrolled in employer coverage that is minimum essential coverage, affordable, and provides minimum value, but you did not enroll during an enrollment period, you cannot get the premium tax credit for qualified health plan coverage for the remainder of the plan year to which that enrollment period related. If the enrollment period applied to more than one plan year and you do not have another opportunity to enroll in the employer coverage for later plan years, you may take the credit during those later plan years.
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 (2021), Premium Tax Credit (PTC) (IRS)
Which plans are eligible employer-sponsored coverage
Employer-sponsored plans that qualify as minimum essential coverage are also called eligible employer-sponsored plans. These include several types of coverage: a group health plan offered in a 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. Not all employer-sponsored health coverage qualifies as minimum essential coverage. For example, employer-sponsored coverage limited to excepted benefits - such as stand-alone vision and dental plans, workers' compensation coverage, and coverage limited to a specified disease or illness - is not minimum essential coverage and therefore is not an eligible employer-sponsored plan. Only plans that meet the minimum essential coverage definition can block premium tax credit eligibility or satisfy the requirement to have health coverage.
Employer-sponsored plans that are MEC are also refer- red to as “eligible employer-sponsored plans.”
Publication 974 (2021), 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 (2021), 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 9.83% 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.