2025 ACA Affordability Percentage
The 2025 ACA Affordability Percentage is 9.02%.
Effective 2025-01-01Source: Rev. Proc. 2024-35 (IRS)Verified 2026-08-30
Required contribution percentageSource: Publication 974 (2025), Premium Tax Credit (PTC) (IRS)Verified 2026-08-30
Compared with 2024
| Item | 2024 | 2025 | Change |
|---|---|---|---|
| Required contribution percentage | 8.39% | 9.02% | +0.63% (+7.5%) |
Who it applies to
The required contribution percentage matters to an individual working out whether employer-sponsored minimum essential coverage offered to them is affordable under § 36B. If the required contribution for that coverage comes to more than 9.02% of household income for a plan year beginning in calendar year 2025, the coverage is not affordable for the purposes of that section. The figure is stated for plan years, not tax years, so it follows the plan's own year: a plan year that begins inside calendar year 2025 uses 9.02% for its whole run, including any months falling in the following calendar year. Rev. Proc. 2024-35 also publishes the applicable percentage table for taxable years beginning in calendar year 2025, which is a different figure used for a different purpose.
What changed this year, and why
For plan years beginning in calendar year 2025, the required contribution percentage under § 36B is 9.02%. This is the figure used to decide whether employer-sponsored minimum essential coverage counts as affordable, and it is indexed based on the rates of premium growth relative to the rates of income growth in guidance issued by the Department of Health and Human Services. Rev. Proc. 2024-35 sets it and is effective for taxable years and plan years beginning in calendar year 2025. The same revenue procedure restates the applicable percentage table used to calculate the premium tax credit, whose indexing § 36B suspends for taxable years through 2025.
Common questions
- What is the ACA affordability percentage for 2025?
- It is 9.02%. Rev. Proc. 2024-35 sets the required contribution percentage under § 36B at 9.02% for plan years beginning in calendar year 2025. That is the share of household income against which an employee's required contribution for employer-sponsored coverage is measured when deciding whether the coverage counts as affordable under that section.
- What does the required contribution percentage actually do?
- It marks the line between affordable and unaffordable employer-sponsored minimum essential coverage. Under § 36B an individual's required contribution for that coverage is compared against household income, and for a plan year beginning in calendar year 2025 a contribution above 9.02% of household income means the coverage is not affordable. The revenue procedure states the percentage; the rules it feeds into are in § 36B and the regulations under it.
- Does 9.02% apply to the calendar year or to the plan year?
- To plan years. The revenue procedure sets the required contribution percentage for plan years beginning in calendar year 2025, and it is effective for taxable years and plan years beginning in that calendar year. A plan year starting inside calendar year 2025 uses 9.02% for its whole run, including months that fall in the next calendar year. A plan year beginning in a different calendar year uses that year's own figure.
- How is the affordability percentage worked out each year?
- It is indexed. The required contribution percentage is adjusted based on the rates of premium growth relative to the rates of income growth in guidance issued by the Department of Health and Human Services. For plan years beginning in calendar year 2025 the additional adjustment described in § 36B was not required, because Treasury and the IRS determined that the failsafe exception in that section applies for those plan years.
- Is the required contribution percentage the same as the applicable percentage table?
- No. They are two different figures published in the same revenue procedure. The applicable percentage table in § 36B is used to calculate an individual's premium tax credit, and it is arranged by household income as a share of the Federal poverty line. The required contribution percentage is used only to decide whether employer-sponsored coverage is affordable. Rev. Proc. 2024-35 publishes both for 2025.
- Was the applicable percentage table indexed for 2025?
- No. The revenue procedure notes that § 36B suspends indexing of the applicable percentage table for taxable years through 2025, a suspension introduced by the American Rescue Plan Act and extended by the Inflation Reduction Act. The required contribution percentage was not covered by that suspension: those Acts did not amend the rules relating to it, including the rules on its indexing, which is why 9.02% is an indexed figure.
- Where does the 9.02% figure come from?
- From Rev. Proc. 2024-35, issued by the IRS, which provides the indexing adjustment for the required contribution percentage in § 36B for plan years beginning in calendar year 2025. It supplements Rev. Proc. 2014-37, which set out the methodology used for the calculation. The figure is not a projection or an estimate; it is the published percentage for those plan years.
- Does the required contribution percentage decide how large my premium tax credit is?
- No. It decides only whether employer-sponsored minimum essential coverage counts as affordable. The size of a premium tax credit is calculated using the applicable percentage table in § 36B, which the same revenue procedure publishes for taxable years beginning in calendar year 2025. The figures live in one document but answer different questions, so using the wrong one gives the wrong answer.
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 2025, an employer's offer of health coverage is considered affordable if the employee's share of the annual premium for self-only coverage - called the "employee required contribution" - does not exceed 9.02% of the tax family's household income. The same 9.02% threshold applies when measuring affordability for other tax family members, except the cost used is the employee's share of the annual premium for family coverage (the employee plus all enrollable tax family members). If the employer plan is affordable for the employee but not for a spouse or dependent, those family members may qualify for the premium tax credit by enrolling in a Marketplace qualified health plan, while the employee remains ineligible for the credit because the self-only offer was affordable. The affordability test looks only at the employee's required contribution for self-only coverage when applied to the employee; it does not consider the cost of adding family members.
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 9.02% of your tax family’s household income for 2025.
Publication 974 (2025), Premium Tax Credit (PTC) (IRS)
An affordable offer blocks the premium tax credit
For 2025, an employer's offer of health coverage prevents an employee from receiving the premium tax credit only if the coverage satisfies two separate tests: affordability and minimum value. Even when the employer plan qualifies as minimum essential coverage, the employee is treated as eligible for the employer-sponsored plan - and therefore ineligible for the premium tax credit for a qualified health plan - only when both conditions are met. If the employer coverage fails either the affordability test or the minimum value test, the employee may qualify for the premium tax credit based on enrollment in a Marketplace qualified health plan. The same dual requirement applies to other tax family members who had the opportunity to enroll in the employer coverage offered to them.
Employer-sponsored plans that are MEC are also refer- red to as “eligible employer-sponsored plans.”
Publication 974 (2025), Premium Tax Credit (PTC) (IRS)
The second test an employer plan has to fail
An employer-sponsored plan meets the minimum value test 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. This 60% threshold is measured against the expected cost of benefits for a standard population using actuarial principles, not against what any particular employee actually spends on cost-sharing. The summary of benefits and coverage that an employer must provide will indicate whether the plan provides minimum value. Even if employer coverage is affordable, it does not block the premium tax credit unless it also satisfies the minimum value requirement. Both tests must be met for an offer of coverage to prevent an employee from qualifying for the credit through a Marketplace qualified health plan.
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 (2025), Premium Tax Credit (PTC) (IRS)
A waiting period is not coverage you can use
An employee is not considered eligible for employer coverage during any month when benefits under the plan are not yet available, such as a waiting period before the coverage becomes effective. During that month, the employee can receive the premium tax credit for a qualified health plan if otherwise eligible. However, if the employee could have enrolled in employer coverage that was affordable and provided minimum value during an enrollment period but chose not to enroll, the employee cannot take the premium tax credit 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 no further enrollment opportunity exists for later plan years, the employee may take the credit during those later years, provided all other conditions are met.
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 (2025), Premium Tax Credit (PTC) (IRS)
Which plans are eligible employer-sponsored coverage
An eligible employer-sponsored plan is an employer-sponsored plan that constitutes minimum essential coverage. The category includes insured group health plans offered in the group market, self-insured group health plans for employees, certain expatriate health plans, and the Nonappropriated Fund Health Benefits Program of the Department of Defense. These employer-sponsored plans may also include retiree or COBRA coverage. Employer-sponsored health coverage limited to excepted benefits - such as stand-alone vision and dental plans, workers' compensation, or disease-specific coverage - is not minimum essential coverage and therefore does not count as an eligible employer-sponsored plan for purposes of the premium tax credit.
Employer-sponsored plans that are MEC are also refer- red to as “eligible employer-sponsored plans.”
Publication 974 (2025), 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 (2025), 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 9.02% 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.