IRS Releases Affordability Information for Calendar Year 2023
The IRS released Rev. Proc. 2022-34 on July 29, 2022. This document provides updated ACA affordability calculations for health plans in the 2023 calendar year. The IRS has determined that a health plan in calendar year 2023 will be considered “affordable” under the ACA if the employee premium payments are no more than 9.12% of their annual salary. This is a large decrease from the 2022 affordability percentage 0f 9.61% and, as a result, employee contributions that are compliant this year will not be compliant come 2023.
This new affordability percentage will be in effect for all ACA-compliant health plans beginning on January 1, 2023. Employers should prepare their HR Departments to adjust affordability calculations so that employees will not be paying too much for their premiums come the 2023 calendar year.
You can read the entire IRS announcement HERE.