Federal Poverty Level (FPL)
If the self-only employee contribution is at or below 8.39% of the federal poverty level, the offer is affordable. (For 2024 plan years, this equates to $101.93 or less per month, which is a reduction from the 2023 plan year limit of $103.28.)
Rate of Pay
If the self-only employee contribution is at or below 8.39% of the employee’s monthly pay rate, the offer is affordable. For full-time hourly employees, the employee’s hourly pay rate is multiplied by 130 hours, regardless of actual hours worked. Tips, commissions, and other variable pay cannot be included when using this safe harbor.
W-2 Box 1 Wages
If the self-only employee contribution is at or below 8.39% of the employee’s Box 1 wages, the offer is affordable. This can only be determined at the close of the calendar year.
