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From the brief of Friday, November 6, 2026 · No. 22

From the daily brief · Software

ACA affordability line rises to 10.22% of income for 2027 plan years, up from 9.96%

It matters if you have 50 or more full-time staff or are about to; under 50, the effect is small.

By Carter Josephson · · 1 min read

What happened

The IRS published Rev. Proc. 2026-26 on July 21, 2026, setting the required contribution percentage at 10.22% for plan years beginning in 2027, up from 9.96% for 2026.

What it means for a 10-to-50-person business

Employers with 50 or more full-time equivalents must offer coverage whose employee-only cost is no more than that share of income, or risk a penalty. At 10.22%, a worker earning $50,000 can be charged up to $5,110 a year ($426 a month) and still count as affordable, against $4,980 now. Most owners with 10 to 50 staff are not subject to that rule, so for them the effect is small. It applies if you sit near 50 employees, since hours of part-timers count toward the total. A plan year that starts before January keeps 9.96% until its next start date.

What to do
Ask your vendor

If you are near 50 full-time equivalents, ask your broker or payroll provider to rerun employee-only contribution rates against 10.22% before open enrollment.

What it costs
What it costs
Maximum affordable charge at $50,000 pay
$5,110/yr in 2027 vs $4,980 in 2026
Broker or payroll check
1 hr (about $30 at $30/hr)
Doing nothing
$0 under 50 FTEs; at 50 or more, penalties apply if rates miss the line
Sources
irs.gov (primary)

Three to five of these, every weekday morning.

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