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The Wagner Law Group

The Wagner Law Group, A Professional Corporation, is a nationally recognized ERISA & employee benefits, estate planning, employment, labor & human resources practice. 


Established in 1996, The Wagner Law Group has 22 attorneys engaged exclusively in employee benefits, estate planning and employment law. Six of our attorneys are AV rated by Martindale-Hubbell as having very high to preeminent legal abilities and ethical standards. The firm is among the largest ERISA boutiques in the country. Our practice is national in scope, with clients in more than 40 states and several foreign countries.





Contact Info

The Wagner Law Group


  Integrity | Excellence



Tel: (617) 357-5200 

Fax: (617) 357-5250 

99 Summer Street 

13th Floor

Boston, MA 02110

Palm Beach Gardens 

Tel: (561) 293-3590
Fax: (561) 293-3591
7108 Fairway Drive
Suite 125
Palm Beach Gardens, FL 33418



Tel: (813) 603-2959

Fax: (813) 603-2961

101 East Kennedy Boulevard

Suite 2140
Tampa, FL  33602 


San Francisco

Tel: (415) 625-0002

Fax: (415) 358-8300

300 Montgomery Street

Suite 600

San Francisco, CA 94104


St. Louis

Tel: (314) 236-0065

Fax: (314) 236-5743
100 South 4th Street, Suite 550
St. Louis, MO  63102 







May 12, 2016


 Health and Welfare Law Alert




  IRS Releases ACA Affordability Rates for 2017






The Internal Revenue Service has released Revenue Procedure 2016-24 to implement index adjustments in 2017 for certain Affordable Care Act ("ACA") contribution percentages.


Background.  Under ACA, contribution percentages are used to determine: (i) whether an Applicable Large Employer ("ALE") is subject to the ACA's employer shared responsibility penalty for failing to provide affordable coverage that provides minimum value to a full-time employee, (ii) whether an individual is exempt from the ACA's individual mandate penalty due to lack of access to affordable coverage, and (iii) the amount of an eligible taxpayer's ACA premium tax credit.



The ACA's employer shared responsibility rules require ALEs to offer affordable, minimum value health coverage to full-time employees.  (Note: ALEs are employers that had 50 or more full-time equivalent employees during the preceding calendar year.) The ACA provides that an ALE's coverage is affordable if the employee's required contribution for self-only coverage does not exceed a certain percent of the employee's household income for that tax year. ALEs that fail to provide affordable coverage are liable for a penalty of $3,000 per year per each full-time employee who receives a premium tax credit through an Exchange. 



The ACA's individual mandate requires most individuals to either obtain minimum essential coverage or pay a penalty.  Individuals who lack access to affordable coverage, however, are exempt from the mandate.  The ACA provides that coverage is affordable for an employee if the required contribution for the lowest-cost, self-only coverage does not exceed a certain percent of the employee's household income for that tax year. 



The ACA's premium tax credits help low-income individuals and families afford health insurance purchased through a state or federal Marketplace.  A taxpayer's premium tax credit is the lesser of (i) the premiums for the plan or plans in which the taxpayer or one or more members of the taxpayer's family enrolls, and (ii) the excess of the premiums for the applicable second lowest cost silver plan covering the taxpayer's family over the taxpayer's contribution amount.  A taxpayer's contribution amount is calculated as a percentage of the taxpayer's household income, based on the federal poverty level.  Thus, a taxpayer's contribution amount increases as the taxpayer's household income increases. 



Revenue Procedure 2016-24.  Revenue Procedure 2016-24 implements the following adjustments to the ACA's contribution percentages:



Employer Shared Responsibility.  For 2017, the required contribution percentage has increased to 9.69% (from 9.66% in 2016).  This means that if an employee's share of the premium for employer-provided coverage (in 2017) is more than 9.69% of his or her household income, the coverage is not considered affordable for that employee and the ALE may be liable for a penalty if that employee obtains a premium tax credit through an Exchange.



Individual Mandate.  For 2017, the required contribution percentage for determining whether an employee has access to affordable coverage increases to 8.16% (from 8.13% in 2016).  Thus, an employee will be determined to have access to affordable coverage if the required contribution for the lowest-cost, self-only coverage does not exceed 8.16% of household income. 



Premium Tax Credit.  For 2017, the contribution amounts are as follows:


  • Up to 133% FPL: 2.04%
  • 133 - 150% FPL: 3.06 - 4.08%
  • 150 - 200% FPL: 4.08 - 6.43%
  • 200 - 250% FPL: 6.43 - 8.21%
  • 250 - 300% FPL: 8.21 - 9.69%
  • 300 - 400% FPL: 9.69%.


Revenue Procedure 2016-24 is available at: https://www.irs.gov/pub/irs-drop/rp-16-24.pdf






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This Newsletter is provided for information purposes by The Wagner Law Group to clients and others who may be interested in the subject matter, and may not be relied upon as specific legal advice.  This material is not to be construed as legal advice or legal opinions on specific facts. Under the Rules of the Supreme Judicial Court of Massachusetts, this material may be considered advertising.