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Affordability vs. Unaffordability
Affordability vs. Unaffordability

Understanding how affordability is determined

Updated over a week ago

The Affordable Care Act (ACA) that began in March 2010 requires employers with more than 50 full-time equivalent employees to provide health insurance to their employees. Employers that don’t provide affordable insurance could receive penalties.

One of the great things about the ICHRA Health Care Plan is that it can satisfy the employer mandate requirements. Employers that have been using complicated group plans to meet the mandate requirements have a new, much simpler option with the ICHRA Health Care Plan.

An ICHRA Health Care Plan is affordable if the remaining amount an employee has to pay for an individual silver plan on the exchange is less than 9.83% of the employee’s household income.

Affordable HRA Contribution > Lowest Cost Silver Plan - (9.83% * Employee Household Income)

This means that an affordable contribution must be greater than the lowest-cost silver plan an employee can purchase minus 9.83% times the employee’s household income.

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