ACA employer affordability threshold 2026, 9.96% safe harbors.

The 2026 percentage

Rev. Proc. 2025-25 sets the Required Contribution Percentage under section 36B(c)(2)(C)(i)(II) at 9.96% for plan years beginning in calendar year 2026. Coverage is affordable for an employee if the required contribution for the lowest-cost self-only plan providing minimum value does not exceed that share of household income. The regulations still say 9.5 percent in the safe harbor text; IRS Notice 2015-87 says employers may rely on the indexed percentage.

The three safe harbors

Under 26 CFR 54.4980H-5(e)(2), an employer that offers minimum essential coverage with minimum value avoids a 4980H(b) payment for an employee if the offer meets one of these tests. Use is optional and may be applied to reasonable categories of employees on a uniform basis.

• Form W-2: the employee's required contribution for the year does not exceed the percentage of the employee's W-2 wages from the employer. Tested after year-end.
• Rate of pay: for an hourly employee, the monthly contribution does not exceed the percentage of 130 hours times the lower of the hourly rate on the first day of coverage or the lowest rate during the month. For a salaried employee, the percentage of monthly salary as of the first day of coverage.
• Federal poverty line: the monthly contribution does not exceed the percentage of the single-person federal poverty line for the year, divided by 12.

Worked example (2026, 9.96%)

A $150 monthly premium passes the first three and fails the federal poverty line harbor, so the employer would need to use another harbor.

Limits

• The safe harbors protect the employer from the 4980H(b) payment only; an employee can still qualify for a premium tax credit if the offer is unaffordable on household income.
• The calculator uses the 2026 percentage only. For other years, read the IRS revenue procedure for that year.
• Self-only cost is the test; family coverage cost does not matter for affordability.

FAQ

What is the 2026 ACA affordability percentage for employers?

9.96 percent for plan years beginning in 2026, per Rev. Proc. 2025-25.

Which premium do I test?

The employee cost of the lowest-cost self-only coverage that provides minimum value.

Do I have to use a safe harbor?

No. Use is optional, and you may apply one to a reasonable category of employees on a uniform and consistent basis.

Does a safe harbor stop an employee from getting a premium tax credit?

No. It protects the employer from the 4980H(b) payment even if the employee qualifies for the credit.

Why does the regulation say 9.5 percent?

The regulation text predates indexing. Notice 2015-87 says employers may use the indexed percentage.

How is the federal poverty line harbor calculated?

The single-person federal poverty line for the year divided by 12, times the percentage.

Sources

Retrieved 2026-11-02. Statute and regulation text read through the eCFR API (current as of 2026-10-29) or the publisher URLs below.

• IRS, Rev. Proc. 2025-25 (2026 applicable percentage table and required contribution percentage): 9.96 percent for plan years beginning in 2026.
• 26 CFR 54.4980H-5, Liability for the section 4980H(b) assessable payment: Affordability safe harbors in paragraph (e)(2).
• IRS Notice 2015-87, Q&A 12: Employers may use the indexed percentage in the safe harbors.
• HHS ASPE, 2026 Poverty Guidelines: $15,960 for one person in the 48 contiguous states.