The IRS has published Revenue Procedure 2019-29, revealing the anticipated 2020 Employer Play or Pay “mandate”.
Employer-sponsored health coverage will satisfy affordability if the employee contribution towards the lowest-cost, self-only health plan offered does not exceed 9.78% of the employee’s household income (safe harbors i.e. Box 1 W-2, Rate of Pay, and Federal Poverty Line remain available to employers).
This is a decrease from the 2019 rate of 9.86%.
As a reminder, the 2020 affordability rate will take effect upon your plan’s 2020 renewal date. If you renew on 4/1/2020, as an example, that is when the 9.78% rate will take effect.