On July 21, 2026, the IRS released Revenue Procedure 2026-26. For plan years beginning in calendar year 2027, the required contribution percentage used to judge whether employer-sponsored coverage is “affordable” under IRC §36B is 10.22%.

That is up from 9.96% for plan years beginning in 2026 (Rev. Proc. 2025-25). It is the highest indexed percentage in the series.

What the number actually controls

Applicable large employers (ALEs) under the ACA employer shared-responsibility rules generally must offer full-time employees (and their dependents) coverage that is affordable and provides minimum value, or risk penalties. Affordability is tested against the employee’s required contribution for self-only coverage under the lowest-cost minimum-value option the employer offers that employee — not family premiums.

Because employers usually do not know household income, most sponsors rely on one of the IRS safe harbors (Form W-2, rate of pay, or federal poverty line). Whatever method you use, the percentage input just moved.

Why this week matters for OE

Contribution grids for January 1 plans get locked in the next couple of months. If your 2027 modeling still uses 9.96%, you are pricing against last year’s rule. The new percentage does not force you to raise employee contributions — it changes the ceiling that keeps coverage “affordable” under the pay-or-play test.

Also note: the revenue procedure indexes the premium tax credit Applicable Percentage Table for taxable years beginning in 2027. That table matters more for Marketplace shoppers than for most group medical designs, but ICHRA shops that lean on employee individual coverage should keep both numbers in the same worksheet.

What employers should do

  1. Tell whoever builds your 2027 contribution model to swap in 10.22% and re-run the safe harbor you actually use.
  2. Hold the federal poverty line safe-harbor dollar caps until HHS publishes the 2027 FPL figures — do not invent them from this revenue procedure alone.
  3. Confirm minimum-value status for the plan option you are using for the affordability test.
  4. For non-calendar plan years, apply the percentage in effect when that plan year begins (2026 plans still use 9.96% until the 2027 plan year starts).

If you want a sanity check on how contribution changes interact with HSA/FSA/HRA administration and consolidated billing for the fall OE file cycle, that conversation is cheaper in July than in October.