The affordable threshold under the ACA is defined as what percentage of household income?

The affordable threshold under the ACA is defined as what percentage of household income?

• A. 9.5% of household income
• B. 9.12% of household income
• C. 8.5% of household income
• D. 10% of household income

Answer: (B)

Affordability for ACA premium credits is measured as a share of household income. The lowest-cost self-only employer plan contribution is compared to a specific percentage of that income to decide if the employer’s offer is affordable. That percentage is set annually by the IRS, so it can change from year to year. For this item, the threshold used is 9.12% of household income. If the employee’s required contribution for the cheapest self-only coverage is at or below 9.12%, the offer is considered affordable and they wouldn’t qualify for subsidies; if it’s above, they may qualify for premium tax credits on the marketplace. This makes 9.12% the correct value for the given question.

Affordability for ACA premium credits is measured as a share of household income. The lowest-cost self-only employer plan contribution is compared to a specific percentage of that income to decide if the employer’s offer is affordable. That percentage is set annually by the IRS, so it can change from year to year. For this item, the threshold used is 9.12% of household income. If the employee’s required contribution for the cheapest self-only coverage is at or below 9.12%, the offer is considered affordable and they wouldn’t qualify for subsidies; if it’s above, they may qualify for premium tax credits on the marketplace. This makes 9.12% the correct value for the given question.