IRS sets 2027 ACA affordability threshold at 10.22%, employer mandate penalty rises to $5,670
Key points
- The 2027 ACA affordability threshold is 10.22%, up from 9.96% in 2026
- The Section 4980H(b) penalty is $5,670 per affected employee for 2027
- Applicable large employers must finalize contribution rates before January 1
The IRS has set the ACA affordability threshold for 2027 plan years at 10.22%, up from 9.96% in 2026 and the highest ever. The Section 4980H(b) employer mandate penalty rises to $5,670 per affected employee annually for 2027, from $5,010 in 2026 and $4,350 in 2025. Applicable large employers must finalize contribution rates before January 1. For reference only; not legal advice.
What employers should do
- Finalize 2027 employee health plan contribution rates before January 1 to meet the affordability threshold
- Calculate Section 4980H(b) penalty exposure and review employee coverage
Policy details
- Jurisdiction
- Federal
- Status
- Signed, not yet effective
- Effective date
- 2027-01-01
- Employers covered
- Applicable large employers (ALEs)
- Official source
- View official source ↗
Original report: Insurance Business ↗Edited with AI assistance. Facts are based on official sources and original reports. For information only; not legal, immigration or insurance advice.