Each year, the IRS sets the ACA affordability threshold—the maximum percentage of income that employees can be required to pay for employer-sponsored health insurance before that coverage is considered "unaffordable" and employees can access marketplace subsidies instead. For 2026, this threshold matters for millions of workers in Florida and across the country.

What Is the Affordability Threshold?

Under the ACA employer mandate, large employers (50+ full-time equivalent employees) must offer minimum essential coverage to full-time employees. But not just any coverage qualifies—it must also be "affordable." If the coverage isn't affordable, employees can decline it and shop on the marketplace with subsidy eligibility.

Affordability is measured as: your premium contribution for employee-only coverage must not exceed a set percentage of your household income. The IRS adjusts this percentage annually.

2026 Affordability Threshold

For 2026, the IRS set the ACA affordability threshold at 9.02% of household income. This is slightly lower than prior years, reflecting downward adjustment under the IRS's indexing formula.

In practical terms: if your employer charges you more than 9.02% of your household income for employee-only coverage, the coverage is "unaffordable" under the ACA. You can then decline the employer coverage and shop on the ACA marketplace with premium tax credit eligibility.

Example: Florida Worker with Employer Coverage

If you earn $50,000/year and your employer charges $4,600/year ($383/month) for employee-only coverage, that's 9.2%—above the 9.02% threshold, meaning the coverage is unaffordable. You could potentially decline it and qualify for marketplace subsidies instead.

Why This Matters

The affordability threshold creates a decision point for Florida workers whose employer coverage costs are near the line:

  • If your employer coverage is affordable (≤9.02% of income): you generally cannot receive marketplace subsidies, even if the coverage isn't great
  • If your employer coverage is unaffordable (>9.02% of income): you can decline the employer plan and enroll in marketplace coverage with subsidies
  • This calculation applies to employee-only coverage—the ACA family glitch was addressed by IRS rule, now making affordability assessable for family coverage as well

The "Family Glitch" Fix

Historically, if an employee's individual coverage was affordable, the entire family was ineligible for marketplace subsidies—even if adding family members made employer coverage very expensive. The Biden administration fixed this "family glitch" through IRS rulemaking. As of 2023 and continuing in 2026, family affordability is assessed separately. If family coverage exceeds the threshold as a percentage of household income, family members may be eligible for marketplace subsidies even if employee coverage is affordable.

Impact on Employer Decisions

Florida employers design their benefit contributions with the affordability threshold in mind. As the threshold drops (becoming more restrictive), more employees may find employer coverage "unaffordable" under the rule—giving them marketplace subsidy access. Some employers adjust their cost-sharing to stay just below the threshold to avoid marketplace competition.

Is Your Employer Coverage Affordable?

Not sure whether your employer coverage crosses the affordability line? A licensed advisor can help you run the numbers. Get a free consultation to understand your options.

Frequently Asked Questions

What is the ACA affordability threshold for 2026?
The IRS set the 2026 ACA affordability threshold at 9.02% of household income. If your employer charges you more than this percentage of your income for employee-only health insurance, that coverage is considered unaffordable, and you may be eligible for ACA marketplace subsidies.
If my employer coverage is unaffordable, can I just enroll in a marketplace plan instead?
Yes. If your employer coverage is unaffordable (exceeds the 9.02% threshold), you can decline it and enroll in a marketplace plan with premium tax credit eligibility. You cannot receive marketplace subsidies if you're enrolled in qualifying employer coverage, even unaffordable coverage.
What happened to the family glitch?
The IRS fixed the family glitch in 2023 rules that continued into 2026. Previously, if an employee's own coverage was affordable, the whole family was blocked from marketplace subsidies—even if family coverage was extremely expensive. Now, family affordability is assessed separately, allowing family members to access marketplace subsidies if family coverage exceeds the threshold.
Does this threshold affect small employers?
The employer mandate and affordability standards primarily apply to Applicable Large Employers (50+ FTE employees). Small employers (under 50 FTE) are not subject to the employer mandate, though they can still offer coverage voluntarily.
How do I calculate whether my employer coverage is affordable?
Divide your annual premium contribution for employee-only coverage by your household MAGI (not just your salary). If this percentage exceeds 9.02% in 2026, your coverage may be considered unaffordable under the ACA rule.

Licensed Florida Health Insurance Producer

This resource is maintained by a licensed Florida health insurance producer (NPN #21249133). We help Florida residents find ACA marketplace plans, compare coverage options, and enroll in health insurance. Content is informational and not legal or financial advice.

Sources & Further Reading