Many applicable large employers (ALEs) utilize the federal poverty line (FPL) affordability safe harbor to avoid penalties under the Affordable Care Act (ACA). Calendar year 2021 plans have known for several months that to be FPL affordable, they should charge employees no more than $104.52 per month for the lowest-cost single plan that provides minimum value. However, plans renewing after January 1, 2021, are stuck waiting for the new year’s FPL to be updated in late January before they can know their FPL affordability threshold.
The 2021 federal poverty guidelines have now been announced at $12,880. This means plans renewing February 1, 2021, or later can be FPL affordable if they charge employees no more than $105.50 per month for the lowest-cost single plan that provides minimum value. If an employer is reaching the point they need to charge employees more than that, then they’d evaluate whether the amount they’d like to charge can meet another affordability safe harbor, such as the rate of pay safe harbor.
Below is a table of FPL affordability thresholds for 2020 and 2021.
| Plan year on/after |
Single FPL |
Affordability Percentage |
FPL Affordability for Single MV Plan |
| 1/1/20 | $12,490 | 9.78% | $101.79/mo |
| 2/1/20 | $12,760 | 9.78% | $103.99/mo |
| 1/1/21 | $12,760 | 9.83% | $104.52/mo |
| 2/1/21 | $12,880 | 9.83% | $105.50/mo |
IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information.
This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.