The Internal Revenue Service recently announced that the employer-sponsored health coverage will satisfy the Affordable Care Act (ACA) affordability requirement in 2020 if the lowest-cost, self-only coverage option available to employees does not exceed 9.78% of an employee’s household income. This limit comes down from the current year’s 9.86%.

As part of ACA’s employer mandate, large employers with 50 or more full-time employees, are required to offer minimum essential coverage that provides value and is affordable to all full-time employees. If the employee’s premium contribution for 2020 does not exceed the 9.78% of the employee’s household income, then the coverage is considered affordable under the ACA.