2021 Figure Will Mark Slight Increase from 2020
Under the Affordable Care Act’s employer shared responsibility (pay or play) rules, applicable large employers—generally those who have 50 or more full-time employees (including full-time equivalent employees)—may be subject to a penalty if they do not offer affordable health insurance coverage that provides minimum value to their full-time employees and their dependents.
For plan years beginning in 2021, the Internal Revenue Service has announced that coverage will generally be considered affordable if the employee's required contribution for the lowest-cost self-only health plan offered is 9.83% or less of his or her household income for the taxable year. For plan years beginning in 2020, the applicable percentage is 9.78%. Given that employers are unlikely to know an employee's household income, they may use a number of safe harbors to determine affordability, including reliance on Form W-2 wages.
For additional information, contact Thrive PEO - Oklahoma's best Professional Employer Organization at: thrive@thrivepeo.com or (918) 943-5800.