ACA Affordability Calculator for Applicable Large Employers

To help Applicable Large Employers (ALEs) determine if their plans are compliant with the Affordable Care Act’s Employer Shared Responsibility (ESR) provision, we created a calculator that allows you to determine what you (as the employer) must contribute to be affordable, or what the minimum employee compensation must be to remain compliant.

What is the 2024 Affordability Percentage?

The Affordable Care Act’s Employer Shared Responsibility (ESR) provision requires Applicable Large Employers (ALEs) (Employers with more than 50 full-time equivalents) to offer Affordable Minimum Value Coverage to full-time workers or face potential penalties.

The 2024 Affordability Percentage is 8.39%, a decrease from the 2023 percentage of 9.12%.

This means that a group plan sponsor’s lowest monthly priced health plan (if multiple plans are offered) for employee-only coverage cannot exceed 8.39% of an employee’s monthly income they make from that employer.

This provision applies to your organization if:

  • Your organization is considered an ALE in 2023

  • The Employer Mandate will apply to your organization 2024

  • Your organization is required to adhere to ACA Reporting in 2025 for the 2024 plan year

If your group is not an ALE in 2023, this does not apply to you.

For more detailed information on the ACA Affordability Percentage, who it applies to and an ACA Play or Pay Overview, click here.

What does this mean for you?

Given the large decrease in the adjusted percentage, employer-sponsored health coverage that was considered to be affordable prior to 2024 may no longer be considered affordable in the coming year.

How to Determine if Your Plan is Affordable

Our “Play or Pay” calculator allows you to determine what you as an employer must contribute to be affordable, or what the minimum employee compensation must be to remain compliant.

See below for examples on how the calculator works to generate correct compensation and contribution figures for affordability.

At Caravus, we believe compliance is key. If you are in need of assistance with determining ACA compliance, please feel free to contact us. We’d be happy to assist you.

Alyssa Johnson