The Department of Health and Human Services (HHS) has announced the 2026 federal poverty guidelines, also referred to as federal poverty levels or lines (FPLs). These guidelines are published annually and used by a number of federal agencies to help determine eligibility for numerous federal healthcare assistance programs — including Medicare, Medicaid and the Children’s Health Insurance Program — as well as the Affordable Care Act (ACA).
Under the ACA, the FPLs are used to determine eligibility for premium tax credits or cost-sharing reduction subsidies on the public exchange and to calculate the employee’s required contribution threshold under the FPL affordability safe harbor for the employer shared responsibility mandate.
An employer with 50 or more full-time employees and full-time employee equivalents (i.e., an applicable large employer, or ALE) must offer minimum essential health coverage that is affordable and provides minimum value to its full-time employees and their eligible dependents or face potential penalties.
To meet the affordability requirement, the employee contribution for the lowest-cost health benefit option must not exceed 9.96% (for plan years beginning in 2026) of the full-time employee’s household income. In lieu of requiring employers to calculate each full-time employee’s household income for the year, the IRS allows the use of three affordability safe harbors:
For purposes of applying the FPL safe harbor, the FPL is determined by the state in which the employee is employed. The 2026 FPLs for the 48 contiguous states (and the District of Columbia), Alaska and Hawaii are as follows:
For 2026, the FPL safe harbor is determined by multiplying 9.96% by the applicable FPL threshold and dividing that product by 12 (i.e., $132.47 per month for the contiguous U.S.). The result is the monthly limit on the employee-only contribution for the ALE’s lowest cost option that the employer can require the employee to pay and still qualify for the FPL affordability safe harbor.
Note that the employer shared responsibility regulations allow employers to use the FPL guidelines in effect within six months before the first day of the plan year. Since the 2026 FPLs were not in effect until January 13, 2026, calendar-year plans must use the 2025 FPLs when calculating affordability for purposes of the FPL safe harbor for 2026 (i.e., $129.90 per month for the contiguous U.S.).
