For 2018, the IRS announced a small adjustment to affordability parameters for employer sponsored plans. This may make it easier for SC residents to qualify for a tax credit to help pay for health insurance through the marketplace!
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Earlier this year, the Internal Revenue Service (IRS) issued Revenue Procedure 2017-36 to change the contribution percentages in 2018 that determine the affordability of employer-sponsored minimum essential coverage for plans under the Affordable Care Act (ACA). For 2018, the numbers indicate a slight decrease from 2017 requirements.
For plan years beginning in 2018, employer-sponsored coverage will be considered affordable if the employee’s required contribution for self-only coverage does not exceed:
- 9.56 percent of the employee’s household income for the year — for the purpose of both the employer shared responsibility penalty and premium tax credit eligibility rules (a decrease from 9.69 percent in 2017)
- 8.05 percent of the employee’s household income for the year — for the purpose of exemption from the individual mandate (a decrease from 8.16 percent in 2017)
These updated percentages are effective for taxable years and plan years beginning after Dec. 31, 2017.
Additional information can be found at www.IRS.gov