Compliance Confidence
IRS Increases 2025 ACA Affordability Percentage to 9.02% and Begins Publishing 2025 Plan Limits
IRS Increases 2025 ACA Affordability Percentage to 9.02% and Begins Publishing 2025 Plan Limits
With 2025 approaching fast, the IRS has begun to release some of next year’s indexing adjustment and benefit limits for health and welfare plans.
One of the most-watched IRS adjustments each year is the required contribution percentage used to determine whether employer-sponsored health coverage is considered affordable under the Affordable Care Act (ACA). The IRS once again decreased the affordability baseline from 8.39% in 2024 to 9.02% in 2025. As a reminder, Applicable Large Employers (ALEs) subject to the ACA employer mandate have to offer affordable, minimum value coverage to their ACA full-time employees. For 2025, this means that a job-based health plan’s employee-only coverage needs to cost 9.02% or less of the employee’s household income to be considered affordable.
All Applicable Large Employers (ALEs) subject to the ACA employer mandate are required to offer affordable, minimum value coverage to their ACA full-time employees.
As a reminder, earlier this year the IRS released some of next year’s indexing adjustments and benefit limits for health and welfare plans, including 2025 HSA contribution limits, minimum annual HDHP deductibles, and plan out-of-pocket maximums for HSA eligibility. The table below shows the limits that have been released. Check back often as this table will be updated as new 2025 limits are provided.
| 2024 | 2025 | |
|---|---|---|
| HSA Contribution Limit – Single | $4,150 | $4,300 |
| HSA Contribution Limit – Family | $8,300 | $8,550 |
| HSA Contribution Limit – 55+ Catch-Up Contribution | $1,000 | $1,000 |
| Minimum HDHP Deductible – Single | $1,600 | $1,650 |
| Minimum HDHP Deductible – Family | $3,200 | $3,300 |
| Plan Out-of-Pocket Maximum for HSA Eligibility – Single | $8,050 | $8,300 |
| Plan Out-of-Pocket Maximum for HSA Eligibility – Family | $16,100 | $16,600 |
| Maximum amount made newly available for excepted benefit HRA | $1,950 | $2,100 |
The information the IRS has provided thus far is helpful, but there is still a lot of information coming as employers plan for 2025. This will include limits for FSA contributions, FSA carryovers, and the monthly Qualified Transportation Benefit. As the year winds down, keep in touch with your OneDigital consultant to learn the 2025 limits and how they can impact the benefit plans you offer and participate in.
The IRS has also released a new fact sheet on tax-exempt education aid for employers. You can learn about this expanded guidance on employer-sponsored educational assistance programs here.
Share
Want to learn more about OneDigital?
Connect with a OneDigital expert today.
