February 19, 2020
In January, HHS announced the 2020 federal poverty levels (FPL). The guidelines for the 48 contiguous states is $12,760 for a single person household and $26,200 for a four person household. The guidelines are different for Alaska ($15,950 and $32,750, respectively) and Hawaii ($14,680 and $30,130, respectively).
The FPL plays an important role under the ACA. Individuals who purchase coverage through the exchange may qualify for a premium tax credit if their household earnings are within 100% to 400% of the FPL. Employers wishing to avoid a penalty under the employer mandate may use the FPL affordability safe harbor, which means the cost of an employee's required contribution for employer sponsored coverage does not exceed 9.78% (for 2020), down from 9.86% (for 2019), of the single person FPL. This means that the FPL affordability safe harbor threshold in the 48 contiguous states for 2019 would be $103.99 per month, which is $12,760 divided by twelve and multiplied by 9.78%. As a reminder, the FPL safe harbor is only one of the affordability safe harbors; the other two are the rate of pay and Form W-2 safe harbors.
Employers should consider this adjustment to the FPL when determining whether their coverage is affordable, especially if they're using the FPL affordability safe harbor. The 2020 FPL is applicable beginning January 15, 2020.
FPL Announcement »