2027 ACA Affordability Percentage
The 2027 ACA Affordability Percentage is 10.22%.
Effective 2027-01-01Source: Rev. Proc. 2026-26 (IRS)Verified 2026-09-01
Compared with 2026
| Item | 2026 | 2027 | Change |
|---|---|---|---|
| Required contribution percentage | 9.96% | 10.22% | +0.26% (+2.6%) |
Who it applies to
Individuals determining whether employer-sponsored minimum essential coverage is affordable for purposes of the premium tax credit under IRC § 36B, and employers assessing affordability under the employer mandate.
What changed this year, and why
For plan years beginning in calendar year 2027, the ACA required contribution percentage is 10.22%, up from 9.96% for 2026. This percentage determines whether employer-sponsored health coverage is considered affordable under IRC § 36B.
Common questions
- What does the required contribution percentage do?
- It is the percentage used under ACA § 36B to decide whether an employer's offer of health coverage is affordable. If an employee's share of the premium for self-only coverage is more than 10.22% of household income, the coverage is not affordable and the employee may qualify for a premium tax credit.
- How does the 2027 percentage compare to earlier years?
- For plan years beginning in calendar year 2027, the required contribution percentage is 10.22%. For 2026, it was 9.96%.
An affordable offer blocks the premium tax credit
Under the Affordable Care Act, an offer of employer-sponsored health coverage that qualifies as minimum essential coverage blocks access to the premium tax credit only when it is both affordable and provides minimum value. If the employer's plan meets both tests, the employee is considered eligible for employer-sponsored coverage and cannot receive the PTC for a Marketplace qualified health plan. The same rule applies to tax family members who had the opportunity to enroll in the employer's offer: they are also barred from the PTC for months they were eligible to enroll, but only if the coverage available to them was affordable, provided minimum value, and qualified as minimum essential coverage. However, if the employee or a family member actually enrolls in the employer's minimum essential coverage, that person loses eligibility for the PTC regardless of whether the coverage was affordable or provided minimum value. For 2027, the affordability threshold applied under this rule is the required contribution percentage of 10.22%, as published by the IRS.
Affordability and minimum value. Even if you had
Publication 974 (2025), Premium Tax Credit (PTC) (IRS)
The second test an employer plan has to fail
An offer of employer-sponsored health coverage blocks an individual from receiving the premium tax credit (PTC) for a qualified health plan only when two conditions are both met: the coverage must be affordable and the coverage must provide minimum value. If either condition is not satisfied, the individual may still qualify for the PTC. This rule applies to the employee and separately to tax family members who had the opportunity to enroll in employer coverage offered through the employee. However, once an individual actually enrolls in employer coverage that qualifies as minimum essential coverage, that person loses eligibility for the PTC even if the coverage turns out to be unaffordable or fails to provide minimum value. The required contribution percentage used to test affordability for 2027 is 10.22%. If the employee's share of the annual premium for self-only coverage exceeds 10.22% of household income, the coverage is not affordable and the PTC may be available.
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 individual is not considered eligible for employer coverage during months when they cannot receive benefits under the employer plan, such as during a waiting period before the coverage becomes effective. During these months, the individual may qualify for the premium tax credit (PTC) for coverage in a qualified health plan if otherwise eligible. However, if the individual could have enrolled in employer coverage that is minimum essential coverage (MEC), affordable, and provides minimum value but did not enroll during an enrollment period, they cannot get the PTC for the remainder of the plan year to which the enrollment period related. If the enrollment period related to coverage for more than one plan year and there is no other opportunity to enroll, the individual may take the PTC during those later plan years if otherwise eligible. This rule ensures that waiting periods do not block access to the premium tax credit, but failure to enroll when eligible during an enrollment period can affect PTC eligibility for the rest of the plan year.
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
Employer-sponsored plans that are minimum essential coverage (MEC) are also referred to as "eligible employer-sponsored plans." These plans include group health plans offered in a group market, self-insured group health plans 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. However, employer-sponsored health coverage that is limited to excepted benefits is not MEC. Excepted benefits include stand-alone vision and dental plans, workers' compensation coverage, and coverage limited to a specified disease or illness. If your employer offers coverage that is limited to excepted benefits, it does not count as eligible employer-sponsored coverage and does not block you from getting the premium tax credit for a qualified health plan.
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.
Rev. Proc. 2026-26 (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 10.22%.