Inflation-adjusted percentages for ACA items issued

Tax Hot Topics newsletter The IRS issued Rev. Proc. 2019-29 to provide 2020 inflation-adjusted percentages for two items under the Affordable Care Act (ACA).

The first adjustment is to the affordability percentages used to determine the amount of household income that individuals eligible for a premium tax credit under Section 36B must contribute towards the cost of health coverage. The percentages for taxable years beginning in 2020 are as follows:

Inflation-adjusted percentages for ACA items issued

The second adjustment is to the required contribution percentage used to determine whether employer-sponsored minimum essential health coverage is affordable under the ACA. If the coverage is not affordable, the employer may be subject to the employer mandate penalty under Section 4980H. For plan years beginning in 2020, the employee’s required contribution percentage is 9.78% of the employee’s household income.

Jeff Martin
Washington National Tax Office
T +1 202 521 1526

Keith Mong
Managing Director
Washington National Tax Office
T +1 202 521 1554

James Sanchez
Senior Associate
Washington National Tax Office
T +1 202 861 4107

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