2024 ACA Affordability Percentage
The 2024 ACA Affordability Percentage is 8.39%.
Effective 2024-01-01Source: Rev. Proc. 2023-29 (IRS)Verified 2026-08-30
Required contribution percentageSource: Publication 974 (2024), Premium Tax Credit (PTC) (IRS)Verified 2026-08-30
Compared with 2023
| Item | 2023 | 2024 | Change |
|---|---|---|---|
| Required contribution percentage | 9.12% | 8.39% | -0.73% (-8.0%) |
Who it applies to
Individuals determining whether employer-sponsored minimum essential coverage is affordable under IRC § 36B, and employers assessing potential liability under the employer shared responsibility provisions.
What changed this year, and why
The IRS published the required contribution percentage for 2024 under the Affordable Care Act in Revenue Procedure 2023-29.
Common questions
- What is the ACA affordability percentage for 2024?
- For plan years beginning in calendar year 2024, the required contribution percentage is 8.39 percent. An employee's required contribution for self-only coverage is considered affordable if it does not exceed 8.39 percent of household income.
- What happens if employer coverage exceeds this percentage?
- If the employee's required contribution for self-only coverage exceeds 8.39 percent of household income, the coverage is not treated as affordable and the employee may qualify for a premium tax credit through a Health Insurance Marketplace.
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 2024, an employer health plan is generally considered affordable if the employee's share of the annual premium for self-only coverage - sometimes called the "employee required contribution" - does not exceed 8.39% of the tax family's household income. The same 8.39% threshold applies when testing affordability for other tax family members, but using the cost of covering the employee and those family members together rather than self-only. If the plan is affordable for the employee but not for a spouse or child, those family members may qualify for a premium tax credit by enrolling in a Marketplace qualified health plan, while the employee remains ineligible because the self-only offer was affordable. Affordability is measured only against household income, not against the cost of covering the entire family, which means a plan can pass the affordability test for the employee even when family coverage is substantially more expensive.
How to determine if the plan is affordable. Your em- ployer coverage is generally considered affordable for you 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 8.39% of your tax family’s household income for 2024.
Publication 974 (2024), Premium Tax Credit (PTC) (IRS)
An affordable offer blocks the premium tax credit
Even when an employer plan qualifies as minimum essential coverage, an individual is considered eligible for employer-sponsored coverage - and therefore blocked from receiving a premium tax credit for a Marketplace plan - only if the employer coverage is both affordable and provides minimum value. If the employer plan fails either test, the individual may still qualify for the premium tax credit. However, once a taxpayer or family member actually enrolls in employer coverage that qualifies as minimum essential coverage, that enrolled individual cannot claim the premium tax credit for a Marketplace plan, regardless of whether the employer coverage was affordable or provided minimum value. Tax family members who were eligible to enroll in the affordable, minimum-value plan but did not enroll during an enrollment period may lose the ability to get the premium tax credit for the remainder of the plan year.
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 (2024), 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 also provides substantial coverage of inpatient hospitalization services and physician services. This means an employee's expected cost-sharing - deductibles, co-pays, and co-insurance - must be no more than 40% of the cost of the benefits. That 40% cap is calculated using actuarial principles applied to benefits provided to a standard population, not based on what any particular employee actually pays in cost sharing during the year. An employer must provide a summary of benefits and coverage that lets employees assess whether the plan meets this test. When an employer plan fails to provide minimum value, the individual offered that coverage may be eligible for a premium tax credit for a Marketplace qualified health plan, assuming the plan is also unaffordable or the individual is otherwise eligible.
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. 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 (2024), Premium Tax Credit (PTC) (IRS)
A waiting period is not coverage you can use
During a waiting period before employer coverage becomes effective, an individual is not considered eligible for employer coverage. This means the person can receive a premium tax credit for their coverage in a qualified health plan if they are otherwise eligible for the credit. A waiting period is a gap during which no benefits are payable under the employer plan, so the individual has no usable employer coverage for that month. However, this exception lasts only for months when the individual genuinely cannot receive benefits. If the individual could have enrolled in employer coverage that qualifies as minimum essential coverage and is affordable and provides minimum value but chose not to enroll during an available enrollment period, the individual may lose the ability to get the premium tax credit for the remainder of the plan year. The waiting-period rule therefore applies only to the initial gap before coverage starts, not to periods where the individual simply declined an available offer.
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 (2024), 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 document identifies four categories of plans that fall into this group: 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. In general, these employer-sponsored plans may also include retiree or COBRA coverage. Employer-sponsored health coverage that is limited to excepted benefits - such as stand-alone vision and dental plans, workers' compensation coverage, or coverage limited to a specified disease or illness - does not count as minimum essential coverage and is therefore not an eligible employer-sponsored plan. Only plans that qualify as eligible employer-sponsored plans can trigger the rule that blocks an individual from receiving a premium tax credit.
Employer-sponsored plans that are MEC are also refer- red to as “eligible employer-sponsored plans.”
Publication 974 (2024), 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 (2024), 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 8.39% 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.