2017 Federal Poverty Levels and Employer Mandate Penalties Announced

On Jan. 26, 2017, HHS announced the 2017 federal poverty levels (FPL). The threshold for the 48 contiguous states is $12,060 for a single household and $24,600 for a household of four individuals. The thresholds are different for Alaska ($15,060 and $30,750, respectively) and Hawaii ($13,860 and $28,290, respectively).

The FPL plays an important role under the PPACA. Individuals purchasing coverage through the exchange may qualify for a premium tax credit if their household earnings are within 100 percent to 400 percent 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 9.69 percent (for 2017) of the single FPL. This means that the FPL affordability safe harbor threshold in the 48 contiguous states for 2017 would be $97.38 per month. 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 methods.

Additionally, the IRS has recently updated their website to include the 2017 employer mandate penalty amounts. If an employer fails to offer minimum essential coverage to 95 percent or more of its full-time employees, the Penalty A amount for 2017 is $2,260 (up from $2,160 in 2016) times each full-time employee (minus the first 30 employees). If an employer fails to offer affordable coverage meeting minimum value, the Penalty B amount for 2017 is $3,390 (up from $3,240 in 2016) times each full-time employee receiving a premium tax credit.

2017 FPL Announcement »
2017 Employer Mandate Penalty Amounts (Question 54) »