Find the smallest ICHRA allowance that passes the IRS affordability test
Enter one employee's county, age and pay. You'll get the lowest-cost Silver plan for that person and the minimum monthly allowance that keeps the offer affordable, so you can quote an allowance you can back up. Run it again for the next employee.
Checking one employee's household instead? Use the employee calculator.
How the numbers work
Who this matters for. The employer penalty for unaffordable coverage applies only to Applicable Large Employers, generally 50 or more full-time and full-time-equivalent employees. A smaller employer owes no penalty. For them, affordability matters for one reason: an employee offered an unaffordable ICHRA may turn it down and claim a premium tax credit instead. The safe harbors and the look-back rule are employer-penalty rules, so choose "Fewer than 50" above and the page uses 2027 rates instead. For one employee's exact answer, use the employee calculator.
The test. The employee's cost for the lowest-cost Silver plan, after the allowance, must be no more than 10.22% of household income, or for a 50-or-more employer, of a safe-harbor figure (2027 plan years). Rate of pay uses 130 hours a month for hourly staff, or monthly salary. W-2 uses expected Box 1 wages. Federal poverty line uses $15,960 for one person (2026 HHS guidelines, 48 states and DC).
The premium. The lowest-cost Silver plan sold on the exchange in the employee's county, for the employee alone, non-tobacco, from public CMS plan data for HealthCare.gov and state-run exchanges. Set to "50 or more", it uses January 2026 rates for a plan year starting January 1, 2027, under the IRS look-back rule. Plan year starting later in 2027? Talk to an expert.
General information, not legal or tax advice.