Rev. Proc. 2026-26
Rev. Proc. 2026-26 sets the ACA affordability percentage for plan years beginning in 2027 at 10.22%, up from 9.96% for 2026. It also indexes the premium tax credit percentages.
What it says and why it matters.
The 2027 Percentage
The required contribution percentage for plan years beginning in 2027 is 10.22%.
Premium Tax Credit Table
The procedure also adjusts the applicable percentage table used for premium tax credits.
What Employers Should Do
Review employee contributions for 2027 plan years against the new percentage, using the safe harbor you rely on.
Primary source: Rev. Proc. 2026-26. General information, not legal advice.
A worked example.
Planning 2027 Contributions
An employer’s lowest-cost single option costs the employee $180 a month. A full-time employee’s monthly wages under the rate-of-pay safe harbor are $1,720.
What the Rule Produces
At 10.22%, the line is about $176 a month, so $180 is slightly over it and unaffordable for that employee. The employer lowers the contribution to $170 for 2027.
Four steps to apply it.
1. Pull the percentage
10.22% for 2027.
2. Identify the lowest-cost option
Self-only coverage.
3. Test each class
Use a safe harbor.
4. Adjust
Change contributions where needed.
Where it goes wrong. Testing affordability on the family premium instead of the lowest-cost self-only option.
The questions that come up next.
Does a higher percentage help employers?
It allows a higher employee contribution while coverage still counts as affordable, but the plan still has to provide minimum value.
What about plans that start mid-year?
The percentage in effect at the start of the plan year governs that plan year.
Where are the penalty amounts?
In Rev. Proc. 2026-22.
Does the percentage apply to HRAs?
Special rules can apply. Ask counsel.
When do we apply it?
To plan years beginning in 2027.
Plan-specific questions belong with ERISA counsel, and we will bring them in.
Related sources and guides.
IRS Notice 2025-15
IRS Notice 2025-15 explains how employers can furnish Forms 1095-C on request.
IRS Employer Shared Responsibility Provisions
The IRS publishes an overview of the employer shared responsibility provisions.
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