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ACA COMPLIANCE SOLUTIONS

ACA Affordability Calculator

Check Affordability

$650M+ in IRS penalties mitigated since 2017

One Number Can Trigger a Penalty. See Where You Stand Before the IRS Does.

“Affordability” carries a lot of weight in ACA compliance. Get it right, and your health plan clears the IRS’s employer mandate test. Get it wrong, and a plan you thought was compliant can still trigger a penalty.

The IRS gives employers three ways to prove a plan is affordable. Each method uses different numbers, and each can land on a different answer for the same employee. 

This calculator runs your numbers against all three safe harbors at once, so you can see where your contribution stands (and where it doesn’t) before open enrollment locks in your rates for the year.

How it Works

Select a plan year, enter how the employee is paid, and enter their monthly contribution for self-only coverage.
We’ll calculate:

01
Rate of Pay Safe Harbor

Based on the employee’s hourly rate (× 130 hours) or monthly salary

02
Form W-2 Safe Harbor

Based on the employee’s actual Box 1 wages for the year

03
Federal Poverty Line Safe Harbor

Based on the federal poverty guideline for a single individual, the same threshold regardless of what any one employee earns

If your contribution clears any one of the three, that coverage is considered affordable for that employee under IRS rules. Employers are free to apply different safe harbors to different reasonable employee categories, as long as the chosen method is applied consistently within each group.

ACA Affordability Calculator — enter a plan year, pay type, and monthly contribution to check affordability against the Rate of Pay, W-2, and Federal Poverty Line safe harbors.

1. Plan details

Used for the Federal Poverty Line safe harbor only

2. How is the employee paid?

3. Employee contribution

Required to calculate a result. What the employee pays per month for the lowest-cost, self-only plan that meets minimum value.

Enter the details above to see your result

Coverage is affordable under IRS rules if it clears any one of the three safe harbors.

Calculation details

Safe harborBasisAffordability %Threshold / monthYour contribution

This calculator provides an estimate only and does not constitute legal or tax advice. It does not account for controlled group rules, multiple plan offerings, or mid-year pay changes. Non-calendar-year plans may need to use a different Federal Poverty Line figure depending on the plan year's start date. Confirm your affordability determination with your benefits advisor or legal counsel. Source: IRS Rev. Proc. 2025-25 and HHS federal poverty guidelines.

Contribution too close to the line?

Selerix helps employers set, track, and document ACA affordability year-round — quietly, and before it becomes a penalty.

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A Quick Note on 2026 Numbers

For plan years beginning in 2026, the affordability percentage is 9.96% of household income, up from 9.02% in 2025. This is the largest year-over-year jump since the ACA’s affordability test began. That increase gives employers more room under all three safe harbors, but it also means contribution levels that were compliant last year need a second look before this year’s open enrollment.

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Frequently Asked Questions 

Why does affordability matter if I already offer coverage?

Offering coverage isn’t enough on its own. Applicable Large Employers (ALEs) have to offer coverage that’s both affordable and provides minimum value to full-time employees, or risk a penalty under Section 4980H(b) — even when a plan is technically available to everyone.

Which safe harbor should I use?

Most employers pick one and apply it consistently within a reasonable employee classification, such as hourly versus salaried, job category, or location. The FPL Safe Harbor is the simplest to administer because the threshold doesn’t change from employee to employee. The Rate of Pay and Form W-2 Safe Harbors track actual earnings more closely, and often allow for a higher employee contribution.

Can I use different safe harbors for different employees?

Yes. The IRS provides different safe harbors for different categories of reasonable employees, as long as the one you choose is applied consistently within each group.

What if my plan year doesn’t start January 1?

Non-calendar-year plans may use the federal poverty guideline in effect within 6 months of the plan year’s start date, which may result in a different FPL figure than the one used here. If your plan year starts outside of January, confirm the correct guideline with your compliance partner before finalizing rates.

Is this calculator a substitute for legal or tax advice?

No. This tool is for informational purposes and doesn’t account for every variable — such as controlled-group rules, multiple plan offerings, or mid-year pay changes. Confirm your affordability determination with your benefits advisor or legal counsel before finalizing contribution rates.

Got Questions or Penalties? Let Us Help You Handle ACA

Affordability is one piece of a much bigger ACA puzzle: with full-time status, measurement periods, Form 1095-C reporting, TIN validation, and deadlines that don’t move for anyone. Selerix pairs proven ACA reporting technology with a service team that’s done this before, so compliance runs smoothly in the background instead of taking over your team.

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Steele Benefits is now part of Selerix! Together, we deliver a comprehensive benefits administration, ACA compliance, and employee engagement solution.

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