Last week, the US Department of Health and Human Services released 2021 federal poverty guidelines.  Effective January 13, 2021, the FPL for one individual residing in the 48 contiguous states is $12,880 (up from $12,760 as of July, 2020).

The federal poverty line that plan sponsors may use for purposes of the federal poverty line (FPL) affordability safe harbor is the published rate “in effect within six months before the first day of the plan year of the applicable large employer member’s health plan…” This means that plans with a 2021 calendar year plan year will use the federal poverty level published in July, 2020 for purposes of the safe harbor.

Plan sponsors with later plan year start dates (on or after 1/15/2021) may use the 2021 published FPL safe harbor.  Under the updated FPL, the monthly employee health premium contribution for employee only coverage may be no more than $105.50 for purposes of the ACA federal poverty line affordability safe harbor (9.83% of 1/12th of $12,880).  The monthly employee only premium contribution for plan years beginning before 1/15/2021 must be less than or equal to $104.52 (9.83% of 1/12th of $12,760) to use the FPL safe harbor.

Plan sponsors who wish to ensure their offer of minimum essential health coverage is affordable based on the federal poverty line will want to keep this figure in mind.

If you have questions, please contact your Hays Companies service team member.


This document is provided for general information purposes only and should not be considered legal or tax advice or legal or tax opinion on any specific facts or circumstances. Readers are urged to consult their legal counsel and tax advisor concerning any legal or tax questions that may arise.


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