Updated guidelines set the 2020 federal poverty level (FPL) at $12,760 — up from $12,490 in 2019 — for a person living in the mainland US, but $14,680 in Hawaii and $ 15,950 in Alaska. Under the Affordable Care Act (ACA), the FPL can affect employer shared-responsibility (ESR) assessments in two ways:
- Premium tax credits. Individuals with household incomes between 100% and 400% of the FPL are potentially eligible for premium tax credits for health coverage purchased through a public exchange. Full-time employees' receipt of subsidized exchange coverage can trigger assessments.
- Affordability testing. Employers can use the FPL under one ESR safe harbor to test whether their lowest-cost, self-only minimum essential coverage (MEC) with minimum value is affordable to employees. When conducting this test, an employer may use any applicable FPL in effect within six months before the start of the plan year.
- Noncalendar-year plans beginning in 2020: $103.99, calculated as (9.78% x $12,760 FPL for 2020) ÷ 12, rounded to the nearest penny
- 2020 calendar-year plans: $101.79, calculated as (9.78% x $12,490 FPL for 2019) ÷ 12, rounded to the nearest penny
- Annual Update of the HHS Poverty Guidelines for 2020 (Federal Register, Jan. 17, 2020)
- Q&As on Employer Shared-Responsibility Provisions Under the Affordable Care Act — Affordability (see Q&A 40) (IRS, Sept. 11, 2019)
- Annual Update of the HHS Poverty Guidelines for 2019 (Federal Register, Feb. 1, 2019)
Mercer Law & Policy resources
- HHS posts 2019 federal poverty levels (Jan. 28, 2019)