2026 ACA Affordability Percentage
The 2026 ACA Affordability Percentage is 9.96%.
Effective 2026-01-01Source: Rev. Proc. 2025-25 (IRS)Verified 2026-09-03
Compared with 2025
| Item | 2025 | 2026 | Change |
|---|---|---|---|
| Required contribution percentage | 9.02% | 9.96% | +0.94% (+10.4%) |
Who it applies to
The percentage matters to an individual deciding whether employer-sponsored minimum essential coverage offered to them is affordable under § 36B. If the required contribution for that coverage comes to more than 9.96% of household income for a plan year beginning in calendar year 2026, the coverage is not affordable for the purposes of that section. It is stated for plan years rather than tax years, so it follows the plan's own year: a plan year beginning inside calendar year 2026 uses 9.96% for its whole run, including months that fall in the next calendar year. The same revenue procedure separately publishes the applicable percentage table for taxable years beginning in calendar year 2026, which is used to calculate the premium tax credit itself.
What changed this year, and why
For plan years beginning in calendar year 2026, the required contribution percentage under § 36B is 9.96%, up from 9.02% for plan years beginning in calendar year 2025. The method behind the adjustment changed as well. For 2025 and a number of years before it, the rate of premium growth was based on per enrollee spending for employer-sponsored insurance as published in the National Health Expenditure Account. Beginning in calendar year 2026, guidance from the Department of Health and Human Services provides a new premium growth measure that also captures increases in individual market premiums, and Treasury and the IRS adopted that measure for both the applicable percentage table and the required contribution percentage. Rev. Proc. 2025-25 states the figure and is effective for taxable years and plan years beginning in calendar year 2026.
Common questions
- What is the ACA affordability percentage for 2026?
- It is 9.96%. Rev. Proc. 2025-25 sets the required contribution percentage under § 36B at 9.96% for plan years beginning in calendar year 2026. That is the share of household income against which an employee's required contribution for employer-sponsored coverage is measured when deciding whether that coverage counts as affordable under the section.
- How did the affordability percentage change from 2025 to 2026?
- It rose from 9.02% for plan years beginning in calendar year 2025 to 9.96% for plan years beginning in calendar year 2026. Because the percentage is the ceiling for what an employee can be asked to contribute before coverage stops counting as affordable, a higher figure means a larger contribution can still be treated as affordable under § 36B.
- Why did the affordability percentage rise so much for 2026?
- Rev. Proc. 2025-25 records a change in how the premium growth measure is calculated. For 2025 and a number of years before it, the rate of premium growth was based on per enrollee spending for employer-sponsored insurance in the National Health Expenditure Account. From calendar year 2026, guidance from the Department of Health and Human Services provides a new measure that also captures increases in individual market premiums, and Treasury and the IRS adopted it.
- Does 9.96% 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 2026 and is effective for taxable years and plan years beginning in that calendar year. A plan year starting inside calendar year 2026 keeps 9.96% for its whole run, including any months in the following calendar year. A plan year beginning in a different calendar year uses that year's own figure.
- Is the required contribution percentage the same as the applicable percentage table?
- No. They are separate figures in the same document. Rev. Proc. 2025-25 provides indexing adjustments to the applicable percentage table in § 36B for taxable years beginning in calendar year 2026, which is used to calculate an individual's premium tax credit and is arranged by household income as a share of the Federal poverty line. The required contribution percentage decides only whether employer-sponsored coverage is affordable.
- Does the required contribution percentage set the size of my premium tax credit?
- No. It decides only whether employer-sponsored minimum essential coverage counts as affordable, which is a threshold question. The amount of a premium tax credit is worked out from the applicable percentage table in § 36B, which the same revenue procedure publishes for taxable years beginning in calendar year 2026. Both figures come from Rev. Proc. 2025-25 but they answer different questions.
- Was an additional adjustment applied for 2026?
- No. The revenue procedure states that the additional adjustment provided in § 36B is not required for plan years beginning in 2026, because the Treasury Department and the IRS determined that the failsafe exception described in that section applies for plan years beginning in calendar year 2026. The indexing adjustments themselves still use the methodology described in Rev. Proc. 2014-37 and in guidance issued by the Department of Health and Human Services.
- Where is the 2026 affordability percentage published?
- In Rev. Proc. 2025-25, issued by the IRS, which provides the indexing adjustment for the required contribution percentage in § 36B for plan years beginning in calendar year 2026 and supplements Rev. Proc. 2014-37. The revenue procedure is the source for the figure; it is not a projection, and it applies from the start of a plan year rather than from the date it was issued.
The share of household income that makes an offer affordable
An employer's coverage is affordable when the employee's annual cost for self-only coverage does not exceed 9.96% of the household income. This share of income is called the employee required contribution. For 2026, the threshold is set at 9.96%. If the cost for the employee alone is affordable but family coverage costs more than 9.96% of household income, the employee can still take the premium tax credit for other family members who enroll in a Marketplace plan. The test focuses only on self-only coverage when measuring affordability for the employee, not the total cost to cover the entire family.
For 2026, this annual cost threshold will increase to 9.96%.
Publication 974 (2025), Premium Tax Credit (PTC) (IRS)
An affordable offer blocks the premium tax credit
When an employer offers health coverage that qualifies as minimum essential coverage, the employee is considered eligible for an employer-sponsored plan and cannot receive the premium tax credit for a qualified health plan purchased through the Marketplace, but only if two conditions are both met: the employer-sponsored coverage must be affordable, and the coverage must provide minimum value. This means having access to employer coverage alone does not automatically block someone from receiving financial assistance. The offer must pass both the affordability test and the minimum value test. If either test is not satisfied, the employee may still qualify for the premium tax credit despite having an offer of employer coverage. Family members who are eligible to enroll in the same employer coverage face the same two-part test: the coverage must be both affordable and provide minimum value for them to be blocked from receiving the credit.
In addition, if you or your family member en- rolls in the employer coverage that qualifies as MEC, the individual enrolled cannot get the PTC for coverage in a qualified health plan, even if the employer coverage is not affordable or does not provide minimum value.
Publication 974 (2025), Premium Tax Credit (PTC) (IRS)
The second test an employer plan has to fail
An employer health plan must satisfy two separate requirements to block an employee from receiving the premium tax credit: the plan must be affordable and it must provide minimum value. The affordability requirement focuses on whether the employee's premium cost exceeds a percentage of household income. The minimum value requirement is a separate test that the plan must also pass. If a plan fails either test, the employee may qualify for the premium tax credit despite having an offer of employer coverage. The minimum value test examines whether the employer plan covers a sufficient share of total medical expenses for a standard population. When a plan does not meet minimum value standards, it means the coverage is too limited to count as adequate employer-sponsored coverage that would disqualify the employee from Marketplace subsidies.
In addition, if you or your family member en- rolls in the employer coverage that qualifies as MEC, the individual enrolled cannot get the PTC for coverage in a qualified health plan, even if the employer coverage is not affordable or does not provide minimum value.
Publication 974 (2025), Premium Tax Credit (PTC) (IRS)
A waiting period is not coverage you can use
During a waiting period before employer coverage becomes effective, an employee is not considered eligible for that employer coverage. This means the employee can receive the premium tax credit for coverage in a qualified health plan during those months, if otherwise eligible. However, if the employee could have enrolled in employer coverage that is affordable and provides minimum value but chose not to enroll during an available enrollment period, they lose eligibility for the premium tax credit for the rest of that plan year. This rule prevents employees from declining adequate employer coverage during open enrollment and then claiming subsidies for Marketplace coverage. If the enrollment period relates to coverage for multiple plan years and there is no subsequent opportunity to enroll, the employee may regain eligibility for the premium tax credit in 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 (2025), Premium Tax Credit (PTC) (IRS)
Which plans are eligible employer-sponsored coverage
Eligible employer-sponsored plans that qualify as minimum essential coverage include several types of health coverage. These are: an employee health plan offered in the group market, whether insured or self-insured; 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 coverage or COBRA continuation coverage. When employer-sponsored plans provide minimum essential coverage, they are referred to as eligible employer-sponsored plans. However, not all employer-sponsored health coverage counts as minimum essential coverage. Coverage limited to excepted benefits - such as stand-alone vision or dental plans, workers' compensation coverage, or coverage for a specified disease or illness - does not qualify as minimum essential coverage and therefore does not block eligibility for 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)
COBRA or retiree coverage from a former employer only counts against you while you are enrolled in it
Under IRS rules governing the Premium Tax Credit, if your employment ends and your former employer offers you continued coverage such as COBRA or retiree coverage, that offer does not count against your eligibility for the credit unless you actually enroll. You are considered eligible for the employer coverage for PTC purposes only for the months that you are enrolled. The same rule applies to someone who may enroll by reason of a relationship to a former employee. So a person who declines COBRA or retiree coverage is not treated as having an affordable offer of employer coverage during those months, and may qualify for the Premium Tax Credit if other eligibility requirements are met. For 2026, the required contribution percentage used to measure affordability is 9.96%.
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 (2025), 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 this year's 9.96% threshold 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 the threshold 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.
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 (2025), Premium Tax Credit (PTC) (IRS)
There is no line for the percentage itself - it enters your return as a multiplier on a worksheet
The IRS does not publish the 2026 ACA affordability percentage as a standalone line on the tax return. Instead, it enters the calculation as a decimal multiplier embedded inside a worksheet. For example, the QSEHRA affordability worksheet (Worksheet N) instructs taxpayers to "Multiply line 1 by 0.0902" - the percentage itself is folded into that arithmetic step rather than appearing as a separate line item. For 2026, the required contribution percentage is 9.96%, and the same structural approach applies: the percentage shows up as a multiplier applied to a base amount on the worksheet, rather than as its own line on the return. That product then feeds into later lines of the worksheet to determine whether employer coverage or a QSEHRA is considered affordable. In other words, you will not see a line that reads "9.96%" anywhere on your 2026 return or its worksheets; the percentage only appears indirectly through the arithmetic of multiplying it against another figure to produce an affordability threshold. The reader's own worksheet fills in the updated multiplier for the applicable year.
Multiply line 1 by 0.0902
Publication 974 (2025), Premium Tax Credit (PTC) (IRS)
Give the Marketplace bad numbers on purpose or carelessly, and the safe harbor does not protect you
If you give the Marketplace incorrect information about your household income or the required contribution for your employer coverage on purpose, or with little or no effort to check whether the information is accurate, the special rule that locks in affordability at enrollment does not protect you. Instead, you are treated as having been eligible for affordable employer coverage based on the actual household income shown on your tax return, which can eliminate or reduce the premium tax credits you received. Intentional disregard means you knew the information was wrong when you gave it; reckless disregard means you made little or no effort to verify the information and your lack of effort was substantially different from what a reasonable person would do. The consequence is that the safe harbor that would otherwise let you keep credits based on the Marketplace's enrollment-time estimate is voided, and reconciliation on Form 8962 proceeds against the true income and contribution figures from your return for the 2026 tax year.
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. 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 (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.
Rev. Proc. 2025-25 (IRS)
- Required contribution percentage
the Required Contribution Percentage for purposes of § 36B(c)(2)(C)(i)(II) and § 1.36B-2(c)(3)(v)(C) is 9.96%.