|Employers that are An Applicable Large Employer
|There are three safe harbors that an employer may use to determine affordability for purposes of the employer shared responsibility provisions. Employers are allowed to choose from using either the Form W-2 wages, an employee’s rate of pay or the federal poverty limit to make their affordability determination. The contribution percentage to determine affordability for Plan Years starting in 2024 is 8.39%
2024 percentage is a significant decrease from previous years.
|“A” Penalty Adjusted for inflation: $2,970 for 2024 times total number of FTEs after the first 30 are removed for relief.
“B” Penalty Adjusted for inflation: $4,460 for 2024 times the total number of ACA FTEs who receive the subsidy in the Marketplace (max penalty is capped at the “A” penalty)