ACA affordability just hit 10.22%. What does that change?

How much can you ask employees to contribute toward their own coverage in 2027?

Up to 10.22% of household income, per the safe harbor you elect. That is up from 9.96% for 2026, and it is the highest the threshold has been since the ACA took effect.

Why it matters: the IRS set this in Revenue Procedure 2026-26 on July 21, 2026. If you are an applicable large employer, it quietly changes your 2027 contribution math, and almost nobody is redoing that math before open enrollment.

What it means in practice:

• More room, not a mandate. A higher percentage means you can set a slightly higher employee contribution and still clear the affordability test.
• It applies by plan year, not calendar year. A plan year starting July 2026 keeps using 9.96% until July 2027.
• Minimum value did not change. The plan still has to cover at least 60% of allowed costs.
• The safe harbor has to be consistent. W-2, rate of pay or federal poverty line. Pick one for an employee population and apply it the same way across that group. Document the calculation.

Here is the part worth thinking about. Most employers will read "more room" and pass more cost to employees. That is one option. The other is to hold employee contributions where they are and go find the money somewhere else in the plan, which is a very different conversation with your team in a year when their own costs are climbing.

The affordability threshold decides what you are allowed to charge them. It does not decide what your plan costs you.

If you did not have to shift cost onto your people this year, what would you rather that goodwill buy?

Sources: https://hrworks-inc.com/industry-update/aca-affordability-threshold-increases-for-2027-plan-year/ https://www.epicbrokers.com/insights/compliance-matters-newsletter-august-2026/