ACA affordability calculator for 2026 and 2027

Check your contribution

I use this calculator to estimate a contribution ceiling, then verify the payroll inputs and plan terms. Test employees with the lowest applicable pay in each category only if their contribution amounts and other adjustments are the same. A result here does not establish minimum value or resolve opt-out payments, flex credits or partial-year eligibility.

What the affordability test actually checks

The test looks at one number: what a full-time employee must pay for the lowest-cost self-only plan you offer that provides minimum value. Minimum value requires at least 60% of expected allowed costs for a standard population and substantial coverage of inpatient hospital and physician services. Your richer plans, and what family coverage costs, don't enter the employer test.

The percentage follows the year in which the plan year begins. A July 1, 2026 plan year uses 9.96% through June 30, 2027. Employer penalty dollar amounts, by contrast, are indexed by calendar year and applied monthly. Do not use the plan-year affordability percentage to decide which calendar-year penalty rate applies.

The three safe harbors

• Federal poverty line. The regulation permits a poverty guideline in effect within six months before the first day of the plan year. This calculator uses the prior-year guideline as a conservative default, not a rule that every plan must use that year. For 2027 those defaults produce $135.92 monthly in the contiguous states and DC, $169.90 in Alaska and $156.36 in Hawaii, rounded down. Use the applicable guideline for the employee's work state.
• Rate of pay works when you know each employee's hourly rate or salary up front. For hourly staff, use the lower of the rate on the first day of the coverage period and the lowest rate during the month. For salaried staff, the safe harbor is lost for anyone whose salary is cut during the year, including a cut in hours.
• W-2 wages. Use Box 1 wages, not gross salary. For partial-year employment or offers, the regulation adjusts wages by months coverage was offered divided by months employed, and counts partial months for employment. The calculator's annual-wage field does not perform that case-specific adjustment. Contribution rules must satisfy the safe harbor's consistency requirements; do not assume a year-end average cures every monthly change.
• You can mix them. You may use different safe harbors for different reasonable categories of employees (for example, hourly and salaried, or by job category), as long as you apply each one the same way to everyone in the category.
• Safe-harbor conditions. The safe-harbor regulation conditions its use on offers of minimum essential coverage to full-time employees and their dependents, with minimum value for the employee's self-only coverage. Review the separate 95% offer threshold and its five-employee allowance when evaluating potential penalties. Apply each safe harbor consistently within reasonable categories. Safe harbors protect the employer from the section 4980H(b) affordability penalty; they do not determine a household's premium-tax-credit eligibility.
• Amounts here are rounded down to the cent, so a contribution at or below them passes.

See 26 CFR 54.4980H-5 for safe-harbor conditions and partial-year calculations.

Worked examples with 2026 figures

What changes the employee's cost for the test

• Mid-year raises and cuts. A raise doesn't hurt. A pay cut can, so retest anyone whose pay drops.
• Non-calendar plan years. Use the percentage for the year the plan year starts, and keep it for the whole plan year.
• Part-time employees. The employer test only applies to full-time employees (30+ hours a week). Part-timers you choose to cover don't create penalties.
• Family members. The employer test uses self-only cost. Since 2023, family members may qualify for Marketplace credits if the required contribution for the relevant family coverage is unaffordable and they meet the other eligibility rules. This doesn't create an employer penalty, but it can pull families off your plan.
• ICHRA is tested differently. An individual coverage HRA is affordable if the cost of the lowest-cost silver marketplace plan in the employee's area, minus the monthly allowance, is at or below the limit. See whether to switch to ICHRA.

Who has to pass the test, and what failing costs

Only applicable large employers (50 or more full-time employees including equivalents) face the employer mandate. If an offer fails the applicable rules, no safe harbor or relief protects the employer, and a full-time employee receives a Marketplace premium tax credit, potential annualized section 4980H(b) exposure is $5,010 a year for that employee in 2026 and $5,670 in 2027. The total can't exceed the penalty for offering no coverage at all: $3,780 per full-time employee after the first 30 in 2027.

The penalty is figured month by month and only for employees who actually receive a tax credit. If 3 of your full-time employees had unaffordable offers and claimed credits for all of 2026, the bill would be 3 × $5,010 = $15,030. The IRS proposes it in Letter 226-J, and employers must receive at least 90 days to respond before an assessment; use the deadline on the letter.

The employer penalty test uses self-only coverage. The Marketplace separately evaluates affordability for related individuals using the required contribution for applicable family coverage and household income, with other tax-credit conditions. A family member receiving a credit does not by itself create an employer penalty.

What to do with your result

1. Find your cheapest minimum-value plan Check the plan's summary of benefits or ask your carrier or broker which plan is your lowest-cost option that provides minimum value. That plan's self-only employee share is the only number tested.
2. Pick a safe harbor per employee category FPL if you want one rule for everyone; rate of pay if your lowest earners are well paid; W-2 only as a fallback.
3. Test your lowest-paid employee in each category Use the calculator above. Check contribution amounts and other adjustments too. A higher-paid employee with a larger required contribution may still fail.
4. Fix any shortfall before open enrollment Raise the employer contribution for the cheapest plan, add a lower-cost plan, or set contributions by pay band. Changing contributions mid-year is harder than getting them right at renewal.
5. Record the safe harbor on Form 1095-C ALEs report the safe harbor used on line 16 of Form 1095-C (code 2F for W-2, 2G for FPL, 2H for rate of pay), so your filing shows the IRS why each offer was affordable.
6. Recheck every year The percentage changes each year: 9.96% in 2026, 10.22% in 2027. Recheck when renewal rates arrive.

Making coverage affordable without raising your cost

A lower total premium can make a larger employer contribution easier to afford. I still test the employee share under the chosen safe harbor before treating an offer as compliant.

At Prescience, we design and run your company's health plan, from setup and enrollment to claims, compliance and COBRA. What your team gets:

• An effective $0 deductible, so the plan helps from the first visit.
• Simple copays shown before a visit, capped by a low out-of-pocket maximum.
• A broad national PPO network, plus providers we contract with directly.
• 24/7 physician-led care navigation: a care team that finds the right provider, books appointments and explains costs up front.

What your company gets: one monthly cost set in your quote, usually 10–20% below comparable fully insured coverage and fixed before the plan starts, with no admin fees. You keep your payroll provider, and the plan can start mid-year.