The IRS has announced Revenue Procedure 2019-29, which lowers the ACA’s affordability standard to 9.78 percent for 2020, down from 9.86 percent in 2019. The goal of the Affordable Care Act’s affordability standard is to provide employees with a low-cost group health care option by imposing cost-sharing limits. Group health plan coverage is deemed affordable by the ACA if the lowest-cost single coverage option amounts to 9.78 percent or less of an employee’s household income. Employers whose lowest-cost single coverage health plan option does not comply with the affordability standard may face substantial fines.
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