Two events occurred in 2022 that will affect employer efforts to avoid Affordable Care Act (ACA) employer mandate penalties in 2023: (1) The IRS set the 2023 affordability safe harbor percentage for employer-provided medical coverage to 9.12%; and (2) the Inflation Reduction Act of 2022 extended the enhanced public health insurance marketplace (“Marketplace”) subsidies originally enacted under the American Rescue Plan Act of 2021.
This Alert provides: (i) A summary of the ACA’s employer mandate penalties; (ii) the employer affordability safe harbors and the effect of the 9.12% affordability safe harbor percentage when setting employee contributions for 2023 plan years; and (iii) the potential effect of the extension to the enhanced Marketplace subsidies.
