Free tool
ICHRA affordability calculator
Check whether an ICHRA allowance is “affordable” for an employee under the 2026 ACA threshold — and what that means for their ACA subsidy and your employer-mandate compliance.
Self-only, employee’s area & age
Employee’s required contribution
$100/mo
Silver plan minus allowance
Affordability threshold (9.96%)
$415/mo
9.96% of monthly income (2026)
Likely affordable. The required contribution is at or below 9.96% of income, so this ICHRA is generally considered affordable — the employee would typically take the ICHRA instead of an ACA premium subsidy.
*Estimate for general planning, not a determination or tax/legal advice. Uses the 2026 self-only affordability threshold of 9.96% of household income against the lowest-cost Silver plan minus the ICHRA allowance. Safe harbors (W-2, rate of pay, or federal poverty line) can change the result. Figures change yearly — verify the current values.
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Get a Free QuoteHow ICHRA affordability works
An ICHRA is “affordable” for an employee if their required contribution for a benchmark plan, after the allowance, is at or below an IRS percentage of their household income. For 2026 that percentage is 9.96% of income for self-only coverage. The calculation is: lowest-cost Silver plan (self-only) minus the monthly ICHRA allowance, compared to 9.96% of monthly household income.
Why affordability matters
Affordability decides two things. For the employee, it determines whether they take the ICHRA or keep an ACA premium subsidy. For applicable large employers (50+ full-time-equivalent employees), an affordable ICHRA can satisfy the ACA employer mandate. Because it depends on each employee’s age, location, and income, affordability is calculated per person — see our full affordability guide.
Frequently asked questions
Take the lowest-cost Silver plan available to the employee (self-only, by age and area), subtract the monthly ICHRA allowance, and compare the remainder to 9.96% of the employee's monthly household income (the 2026 threshold). If it's at or below 9.96%, the ICHRA is affordable.
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