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Using the ACA Affordability Calculators

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Affordability calculators for Texas education entities, available in the HR Library (member login required), can be used to ensure employers offer health coverage that is affordable according to the Affordable Care Act (ACA).

The determination of whether insurance is affordable is based on the employee's household income, an amount that includes not only the employee's take-home pay but also income earned through other sources, such as income earned by family members. Because employers cannot accurately determine an employee’s total household income, the IRS has provided three safe harbors that employers may rely upon to calculate affordability: the rate of pay safe harbor, the federal poverty line (FPL) safe harbor, and the W-2 safe harbor. The affordability calculator uses the employee rate of pay for compliance measurement.

The Internal Revenue Service (IRS) annually adjusts the affordability threshold by considering the ratio of premium growth to income growth in the preceding calendar year. The affordability percentage dropped for the third year to 8.39 percent for 2024. The 2023 percentage was 9.12, and the 2022 rate was 9.61 percent.

Plan Year Basis

The affordability percentage applies on a plan-year basis. The impact on Texas educational entities is shown below:

  • TRS-ActiveCare employers need to use the 2023 percentage (9.12 percent) and rates beginning September 1, 2023, to determine affordability for the 2023-2024 plan year. When TRS-ActiveCare rates are released for the upcoming year, employers will use the 2024 percentage (8.39 percent) for the 2024-2025 plan year which begin September 1, 2024.
  • Employers with a plan year beginning in January (calendar year) will use the 2024 percentage (8.39 percent) and applicable rates to ensure coverage is affordable.
  • Employers with a plan year beginning in a different month (e.g., July, October) will use the 2023 percentage (9.12 percent) and rates beginning with the first month of the plan for the 2023-2024 plan year.

Using the Calculators

There are two calculators in the HR Library — one for entities with a September 1 plan year and another for entities with a calendar plan year.

Using one of the calculators is an easy way for employers to ensure they are complying with the ACA affordability rules. Each calculator will determine the lowest hourly rate a full-time employee can be paid for insurance to be affordable.

The ACA Calculator: September 1 Plan Year references TRS-ActiveCare regional premium rates and allows non-ActiveCare districts to enter the applicable premium rates. For example, an employee working in a Region One district participating in the 2023-2024 TRS-ActiveCare plan who receives the minimum required premium contribution of $225 per month must be paid at least $11.64 per hour.

Calculator Updates

HR Services updates the ACA calculators each year to reflect changes to TRS-ActiveCare premiums and the IRS affordability percentage. These updates are completed and released as soon as the applicable data is available. If you have any questions about using the calculators, please email hrservices@tasb.org or call 800-580-7782.  

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April Mabry
April Mabry
TASB HR Services Assistant Director

April Mabry oversees HR Services training services, member library products, and the HRX newsletter. She has provided HR training and guidance to Texas public schools  since 1991. Mabry was a classroom teacher for 11 years in Texas and Michigan.

Mabry has a bachelor’s degree in education from the University of Michigan and certification as a professional in human resources (PHR) and is a SHRM-CP.

HR Services

TASB HR Services supports HR leadership in Texas schools through membership offerings in specialized training, consulting, and other services.

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