ACA Affordability Calculator
Check whether your employee contribution for self-only coverage meets an IRS affordability safe harbor for plan years beginning in 2026 or 2027.
Check your plan’s affordability
Enter what one employee pays each month for your lowest-cost self-only plan that provides minimum value, then pick a safe harbor to test it against.
How the test works
What makes employer coverage “affordable”
An Applicable Large Employer (50 or more full-time and full-time equivalent employees) can owe an IRS penalty if a full-time employee buys subsidized coverage on the exchange because the employer’s plan was unaffordable. Coverage is affordable when the employee’s required contribution for the lowest-cost self-only plan that provides minimum value doesn’t exceed a set percentage of household income: 9.96% for plan years beginning in 2026 and 10.22% for plan years beginning in 2027.
Because employers don’t know household income, the IRS lets you test affordability with one of three safe harbors based on information you already have.
| Safe harbor | Maximum monthly employee contribution | Good fit when |
|---|---|---|
| Federal Poverty Line | One-person poverty guideline × percentage ÷ 12 | You want one number that works for every employee, regardless of pay. |
| Rate of Pay | Hourly: lowest hourly rate × 130 × percentage Salaried: monthly salary × percentage | Pay is steady and you want to set contributions ahead of time. |
| Form W-2 Wages | Box 1 wages × percentage ÷ 12 | Employees work all year and you are comfortable checking after year-end. |
For the Federal Poverty Line safe harbor, you may use any poverty guideline in effect within six months before your plan year begins. Guidelines are published by HHS; Alaska and Hawaii use higher amounts. Full rules are in the IRS employer shared responsibility Q&A.
Common questions
ACA affordability FAQs
Which employee contribution should I enter?
Enter the monthly amount the employee must pay for the lowest-cost self-only coverage option you offer that provides minimum value. Use the employee-only rate even if the employee enrolls in family coverage or a richer plan.
Can we use different safe harbors for different employees?
Yes. You can use one or more safe harbors, but each must be applied on a uniform and consistent basis to all employees in a reasonable category, such as hourly versus salaried employees or employees in different locations.
Our plan year doesn’t start in January. Which percentage applies?
Use the percentage for the calendar year in which your plan year begins. A plan year starting July 1, 2026 uses 9.96%, and one starting January 1, 2027 uses 10.22%. For the poverty line safe harbor, you may use any guideline in effect within six months before the plan year starts.
What happens if our coverage isn’t affordable?
If you are an Applicable Large Employer and a full-time employee declines unaffordable coverage and receives a premium tax credit on the exchange, you may owe an employer shared responsibility payment for that employee. Lowering the employee’s share or testing a different safe harbor are the usual fixes.
Does passing this test mean we are fully ACA compliant?
No. Affordability is one requirement. Applicable Large Employers must also offer minimum essential coverage that provides minimum value to at least 95% of full-time employees and their dependents, and file Forms 1094-C and 1095-C each year.
Not sure which safe harbor to use?
Our brokers can test affordability across your workforce, set employee contributions for renewal, and help you avoid ACA penalties at no cost to you.
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