Federal: IRS Raises ACA Affordability Threshold for 2026 Plan Year

The Affordable Care Act (ACA) affordability threshold will increase to 9.96% for plan years beginning in 2026. 

This threshold, applicable to large employers subject to the ACA’s “play or pay” provision, is the maximum percentage of an employee’s W-2 wages or rate of pay, or the federal poverty line, that they can be asked to contribute toward their employee-only health insurance coverage. 

You can learn more about employer responsibilities under the ACA on the IRS’s Q&A page and in our Understanding Affordability and Safe Harbors guide. 



The IRS released Revenue Procedure 2025-25 on July 18, 2025.