The Affordable Care Act (ACA) requires that employers with more than 50 full-time equivalent employees provide health insurance to their employees. This is known as the ’employer mandate’.
ICHRAs can meet the mandate as long as they are considered ‘affordable.’ An ICHRA is affordable if the employee’s share of the cost for the lowest-cost self-only silver plan is less than a certain percentage of their household income. This percentage is typically set by the IRS and varies each year. If the employee’s cost for the plan meets this affordability threshold, the ICHRA is considered compliant with the ACA’s requirements.
The percentage of household income to maintain affordability in 2026 is 9.96%: [lowest-cost silver plan available cost] – [9.96% of the employee’s household income] = [2025 minimum affordable contribution]