Basic calculationApplicable self-only lowest-cost Silver premium minus the monthly employer allowance equals the employee’s required contribution, subject to the governing rules and any applicable safe harbor.
Information needed
- Employee age or date of birth
- Home ZIP code and, when applicable, primary worksite ZIP code
- Monthly self-only lowest-cost Silver premium
- Monthly employer allowance available for self-only coverage
- Compensation information used under the selected safe harbor
- Plan year and effective date
Why one national allowance can miss
Individual-market premiums vary by age and location. A flat allowance may be generous in one market and inadequate in another, so the employer should test affordability across the census rather than relying on an average.
Affordability affects subsidies
If an individual coverage HRA offer is affordable, the employee and covered household members generally cannot receive a Marketplace premium tax credit for the same coverage period. If it is unaffordable, an otherwise eligible employee may need to decline the arrangement to claim the credit.
Annual affordability percentages and rules can change. Verify the plan-year standard before relying on a result.