Rev. Proc. 2025-25
Rev. Proc. 2025-25 sets the ACA affordability percentage for plan years beginning in 2026 at 9.96%, the figure employers use to test whether employee contributions are affordable.
What it says and why it matters.
The 2026 Percentage
For plan years beginning in 2026, coverage is affordable if the employee’s required contribution for self-only coverage does not exceed 9.96% of income, measured with a safe harbor.
Why It Matters
Affordability decides whether the (b) payment can apply for a full-time employee who receives a premium tax credit.
Non-Calendar Plan Years
The percentage in effect on the first day of the plan year applies for the whole plan year.
Primary source: Rev. Proc. 2025-25. General information, not legal advice.
A worked example.
Checking a 2026 Contribution
A calendar-year employer charges $95 a month for single coverage and uses the federal poverty line safe harbor for a full-time employee whose monthly income under that measure is about $1,305.
What the Rule Produces
At 9.96%, the affordability line is about $130 a month, so $95 is affordable. Under the 2027 percentage of 10.22% the line would be slightly higher.
Four steps to apply it.
1. Pick the safe harbor
Rate of pay, W-2 or poverty line.
2. Apply the percentage
9.96% for 2026.
3. Compare
Check each contribution.
4. Document
Record the test.
Where it goes wrong. Using the 2027 percentage on a 2026 plan year.
The questions that come up next.
What is the 2027 percentage?
10.22%, under Rev. Proc. 2026-26.
Which safe harbors can we use?
W-2 wages, rate of pay and the federal poverty line.
Is it the same for every employer?
The percentage is the same for all, but each employer tests its own lowest-cost self-only option.
Does it apply to plan years?
Yes, to plan years beginning in 2026.
Where do I find the poverty line?
In HHS guidance for the year.
Plan-specific questions belong with ERISA counsel, and we will bring them in.
Related sources and guides.
Rev. Proc. 2026-26
Rev. Proc. 2026-26 sets the ACA affordability percentage for plan years beginning in 2027 at 10.22%.
IRS Notice 2025-15
IRS Notice 2025-15 explains how employers can furnish Forms 1095-C on request.
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