Federal Poverty Line Safe Harbor

If an employer satisfies the requirements for this Safe Harbor, their insurance coverage offering will be considered affordable under the employer mandate.

Who should use the Federal Poverty Line Safe Harbor?

This safe harbor may be most useful for employers with seasonal employees and employers who use the look-back measurement period to determine if variable-hour or seasonal employees have full-time status.

How to use the Federal Poverty Line Safe Harbor

Take the Federal Poverty Line (FPL) for a household of one in the previous year, and divide it by 12. If your employees are not paying more than: 

  • 9 .78% for plan years beginning in 2020
  • 9 .86% for plan years beginning in 2019
  • 9 .56% for plan years beginning in 2018
of the FPL for their health coverage premiums, your coverage is considered affordable under the employer mandate.

Disadvantages of Federal Poverty Line Safe Harbor

This method typically provides the lowest threshold allowed for monthly premiums. Other methods generally allow for a higher monthly premium.

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