An ICHRA lets an employer of any size set a reimbursement amount that employees can use for individual health coverage. Whether that offer is treated as affordable matters for the employee. HealthCare.gov states that employees who have an affordable ICHRA offer — HealthCare.gov also uses the name CHOICE Arrangement — or who are already covered by one, cannot get the premium tax credit on Marketplace coverage. If the offer is not affordable, the employee can choose between the ICHRA and the premium tax credit, but not both, and must decline the ICHRA offer to take the credit.
For plan years beginning in calendar year 2026, the required contribution percentage in IRS Revenue Procedure 2025-25 is 9.96%. HealthCare.gov describes a 2026 CHOICE Arrangement as affordable if the employee's monthly cost for the self-only, lowest-cost Silver plan in the employee's area, after the reimbursement, is less than 9.96% of one-twelfth of the employee's yearly household income. For plan years beginning in calendar year 2027, Revenue Procedure 2026-26 sets the required contribution percentage at 10.22%, and the same comparison uses that later percentage. The percentage is indexed and can change in later years.
This calculator applies that comparison to the figures you enter. You will need the monthly premium for the self-only lowest-cost Silver plan available to the employee in the employee's area, the monthly ICHRA amount that can be used for that self-only coverage, and the employee's yearly household income. HealthCare.gov publishes lowest-cost Silver plan premium tables and an affordability tool. Subtract the monthly reimbursement from the monthly Silver premium (but not below zero). Compare that residual cost with the required contribution percentage times one-twelfth of yearly household income. If the residual is less than the threshold, this estimate treats the offer as affordable on the household-income test described above.
Employers who need the offer to satisfy employer shared-responsibility affordability, including companies that are or may become applicable large employers, should not stop at this household-income estimate. Official affordability safe harbors, including forms based on W-2 wages, rate of pay, or the federal poverty line, and location rules that can apply to an ICHRA, are administered under the Internal Revenue Code and Treasury regulations. This calculator does not apply those safe harbors, and it does not test minimum value. A tax advisor should apply the official rules to your classes, ages, and work locations before you rely on an ICHRA to meet a shared-responsibility standard. See the employer coverage requirement page and the ALE calculator.
The result here is an estimate, not a Marketplace eligibility decision and not tax advice. Employees still have to report the offer when they apply for Marketplace coverage, and the Marketplace makes its own determination. Request a proposal or call (813) 540-1299 if you want help designing an ICHRA contribution and comparing it with a group plan.Estimate ICHRA affordability
Frequently asked questions
What percentages does this calculator use?
For plan years beginning in 2026, 9.96%, from IRS Revenue Procedure 2025-25. For plan years beginning in 2027, 10.22%, from Revenue Procedure 2026-26. Confirm the percentage if you are pricing a later year.
Where do we get the lowest-cost Silver premium?
HealthCare.gov publishes lowest-cost Silver plan premium tables by year. Use the self-only premium for the employee's area, not a family premium and not a plan you prefer for other reasons.
If the offer is affordable, can the employee still take a premium tax credit?
HealthCare.gov states that employees who have an affordable CHOICE Arrangement offer, or who are already covered by one, cannot get the premium tax credit. If the offer is not affordable, the employee can choose the arrangement or the credit, but not both.
Does this calculator apply the W-2 or rate-of-pay safe harbors?
No. It applies the household-income comparison described by HealthCare.gov and the IRS required contribution percentages. A tax advisor should apply any official safe harbor you intend to use.
Is an ICHRA only for applicable large employers?
No. Employers of any size can offer an ICHRA, with at least one employee who is not a self-employed owner or the spouse of a self-employed owner, as HealthCare.gov describes. Affordability still matters for the employee's premium tax credit, and it matters even more if you later need the offer to meet shared-responsibility rules.
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