2027 ACA Affordability

The 2027 affordability line moved to 10.22%. What to check before open enrollment.

The IRS set the ACA affordability percentage at 10.22% for plan years that begin in 2027, up from 9.96% for 2026, and published the 2027 employer shared responsibility amounts. It is the first year the percentage is above 10%.

This guide explains what the number measures, what the penalties are, and the four checks to run before you publish 2027 rates to employees. Send us your renewal and we will test your contribution strategy against it.

The Numbers

Four figures from the IRS for 2027.

The percentage and the penalty amounts are set each year by the IRS. These are the 2027 figures.

Affordability percentage

10.22%

Up from 9.96% for 2026. Read more

Poverty-line safe harbor

About $135.93 a month

The employee-only limit for a calendar-year 2027 plan. Read more

“A” payment

$3,780 a year

Per full-time employee after the first 30, if coverage is not offered to enough employees. Read more

“B” payment

$5,670 a year

Per full-time employee who receives a premium tax credit, capped at the “A” amount. Read more

What It Means

Four ways the new line reaches an employer.

Contribution strategy

A higher ceiling is not a reason to raise employee contributions. Test by tier and pick the safe harbor you can document. Read more

Non-calendar plan years

Plans use the percentage in effect on the day the plan year starts, so a 2026 renewal still uses 9.96%. Read more

Form 1095-C codes

The code you report shows which safe harbor you used, so the test you ran has to be on file. Read more

IRS enforcement

The IRS sends Letter 226J to propose payments and Letter 5699 when returns are missing. Read more

Four Checks

What to do before you publish 2027 rates.

1

Run the safe-harbor test

Test every tier against the 10.22% line using the lowest-cost self-only minimum-value plan. Read more

2

Document the safe harbor

Keep the calculation, the data source and the decision for each plan year. Read more

3

Prepare your filings

Confirm last year’s 1094-C and 1095-C were accepted, and plan this year’s. Read more

4

Send us your contribution split

We test it against the line and show how take-up could change. Read more

Questions we get

Four questions employers are asking about the 2027 affordability line.

What is the 2027 ACA affordability percentage?

The IRS set it at 10.22% for plan years that begin in 2027, up from 9.96% for 2026 (Rev. Proc. 2026-26). It is the most an applicable large employer can charge an… Read more

Does the 2027 affordability percentage apply to my plan year?

Only if your plan year begins in 2027. A plan that starts in 2026 uses the 2026 percentage of 9.96% until it renews, and a plan that starts in 2027 uses 10.22% for its… Read more

What is the penalty for unaffordable coverage in 2027?

If an applicable large employer offers coverage to at least 95% of full-time employees but an offer is unaffordable or lacks minimum value, and the employee receives a… Read more

Does the ACA affordability test apply to employers with fewer than 50 employees?

The employer shared responsibility rules apply to applicable large employers, meaning 50 or more full-time equivalent employees. Smaller employers are not subject to the… Read more

Sources

Where these figures and rules come from.

Affordability percentage

IRS Rev. Proc. 2026-26

2027 affordability percentage of 10.22%, reported by WTW and EY; the 2026 percentage was 9.96%.

Penalty amounts

IRS Rev. Proc. 2026-22

The 2027 section 4980H amounts of $3,780 and $5,670 are in Rev. Proc. 2026-22.

Laws and rules

Federal rules referenced on this page

Premium tax credit eligibility and affordable offers: Internal Revenue Code §36B(c)(2)(C). Employer shared responsibility payment: IRC §4980H. Affordability and safe harbors: 26 CFR §54.4980H-5(e). Reporting: IRS Instructions for Forms 1094-C and 1095-C. This page is general information, not legal or tax advice.

Let’s Get to Work

Send us your renewal.

Four documents — the renewal letter, the plan summary, the contribution split by tier and enrolled counts by tier. We’ll come back with a competitive read, where we see opportunity, and the five questions we’d put to your carrier.

Start the Review248.370.8853

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