The Internal Revenue Service (IRS) has announced an update via Rev. Proc. 2023-29 that pertains specifically to measures of employer-sponsored coverage affordability. The newly released data reveals inflation adjusted amounts for 2024 that will help determine whether such coverage remains “affordable.” This is particularly relevant under the framework of the Affordable Care Act (ACA)’s employer shared responsibility provisions and premium tax credit program.
According to this recent announcement, as reported on JD Supra, the affordability percentage for employer mandate purposes has been indexed at 8.39% for plan years starting in 2024. This is a notable drop in percentage from the previous year, which might have significant implications for both corporations and their employees.
It is critical for organizations and their legal teams, especially those in charge of compliance and employee benefits, to monitor these adjustments closely. These kind of changes can trigger significant alterations in company policies and the design of benefit packages. Furthermore, compliance with these updates is essential to avoid any potential legal issues or penalties.