Updated October 1, 2026. Quick answer: For plan years beginning in 2026 the required contribution percentage that decides whether employer coverage is affordable is 9.96% of household income. IRS Revenue Procedure 2025-25 sets it, together with the 2026 premium tax credit table, which also tops out at 9.96%.
Form 8962 (premium tax credit) for 2025, read line by line: Form 8962 lines 3 to 6 and Form 8962 lines 7 to 8b.
Read line by line from the IRS form text: Form 1095-A Parts I and II, Form 1095-C code 1A and Form 1095-C codes 2D and 2E.
The 2026 percentage
Revenue Procedure 2025-25 says “For plan years beginning in calendar year 2026, the Required Contribution Percentage for purposes of § 36B(c)(2)(C)(i)(II) and § 1.36B-2(c)(3)(v)(C) is 9.96%.” The IRS explains that “This percentage is used to determine whether an individual is eligible for affordable employer-sponsored minimum essential coverage under § 36B.”
2026 premium tax credit applicable percentages
| Household income as a share of the federal poverty line | Initial percentage | Final percentage |
|---|---|---|
| Less than 133% | 2.10% | 2.10% |
| At least 133% but less than 150% | 3.14% | 4.19% |
| At least 150% but less than 200% | 4.19% | 6.60% |
| At least 200% but less than 250% | 6.60% | 8.44% |
| At least 250% but less than 300% | 8.44% | 9.96% |
| At least 300% but not more than 400% | 9.96% | 9.96% |
The Revenue Procedure’s own words: “the Applicable Percentage Table for purposes of § 36B(b)(3)(A)(i) and § 1.36B-3(g) is:” the table above. It is used to calculate the premium tax credit.
What affordable coverage means
HealthCare.gov says “A job-based health plan is considered “affordable” if your share of the monthly premium in the lowest-cost plan offered by the employer is less than: 9.96% of your household income in 2026”. For an employee it adds that “affordability is based on only the premium you’d pay for self-only (individual) coverage”. The lowest-cost plan must also meet the minimum value standard.
What 9.96% means in dollars
Applied to a household income of $60,000, an illustration and not a source figure, 9.96% is $5,976 a year, or $498 a month (computed). A plan whose employee-only premium is below that amount passes this test. The employer’s own testing method and the plan documents decide the result for a given worker.
How it compares with 2027
The percentage is indexed each year. HealthCare.gov lists “10.22% of your household income in 2027”. The 2027 source and detail are on the 2027 affordability percentage page.
Common mistakes
- Applying the 2026 percentage to a plan year that starts in 2027. It is set by plan year.
- Reading the 9.96% as a tax rate. It is a test for whether coverage is affordable.
- Using the credit table’s percentages as the employer test. The two tables share a top figure but are used differently.
Related: the 2027 affordability percentage page, the ACA subsidy cliff, managing MAGI for ACA subsidies, the 2026 retirement numbers hub, and the 2026 federal poverty guidelines.
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Sources
- IRS Revenue Procedure 2025-25, 2026 applicable percentage table and required contribution percentage: https://www.irs.gov/pub/irs-drop/rp-25-25.pdf
- HealthCare.gov, Affordable coverage (glossary): https://www.healthcare.gov/glossary/affordable-coverage/
Sources: the primary documents linked above, read on October 1, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.