The IRS has released a Revenue Procedure, which increases the affordability threshold for ACA (“Affordable Care Act”) Employer Mandate Purposes (“Pay or Play”) to 9.86% for plan years beginning in 2019.

For reference purposes:

  • 2015 Percentage: 9.56% 
  • 2016 Percentage: 9.66%
  • 2017 Percentage: 9.69%
  • 2018 Percentage: 9.56%
  • 2019 Percentage: 9.86%

The Pay or Play rules only apply to employers considered Applicable Large Employers” or “ALEs”.  In general, ALEs are employers that employee an average of at least 50 full time plus full time equivalent employees on business days in during the preceding year.  Under the ACA’s Pay or Play rules, ALEs must offer affordable and adequate coverage to all their full time employees and dependents or face a potential penalty.  These affordability thresholds are used in making the affordability determination.

Please contact your account manager or your broker if you have questions regarding your status as an ALE or the applicability of the ACA Pay or Play rules to your group.

SIMA will continue to monitor this issue and provide updates if additional guidance is released by the IRS.




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