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February 10, 2020

2020 Federal Poverty Level (FPL) Guidelines

The Department of Health and Human Services has released the federal poverty level (FPL) guidelines for 2020.  These poverty guidelines are important for a number of reasons, not the least of which is the Affordable Care Act. 

  • The FPL guidelines are used to determine eligibility for premium assistance and cost-sharing.  
  • Further, for employer shared responsibility purposes, use of the FPL guidelines is one of three safe harbor methods that can be utilized to determine an individual’s household earnings for purposes of satisfying the ACA’s affordability standard.  Coverage under an employer-sponsored plan is deemed affordable to a particular employee if the employee's required contribution to the plan does not exceed 9.78% (indexed for 2020) of the employee's household income for the taxable year, based on the cost of single coverage in the employer’s least expensive plan.  As background, employers subject to the ACA’s employer shared responsibility provisions who fail to offer minimum essential coverage to their full-time employees or fail to offer adequate and affordable coverage may be subject to an excise tax if at least one of its employees qualifies for premium assistance through a marketplace.  If an employer is using the FPL as its affordability standard, it is allowed to use the FPL guidelines in effect six months prior to beginning of the plan year. 
  • In addition, these FPL guidelines are used to determine eligibility for other federal entitlement programs such as the Children’s Health Insurance Program, certain parts of Medicaid, and subsidies for Medicare Part D prescription benefits. 

The 2020 FPL guidelines became applicable on January 14, 2020 (unless an office administering a program using the guidelines specifies a different effective date for that particular program).  Below is a chart reflecting the 2020 and 2019 levels. 

2020 Poverty Guidelines for the 48 Contiguous States and District of Columbia

Note: The FPL limits vary slightly in Alaska and Hawaii

Persons in family/household

2020 Poverty Guidelines

2019 Poverty Guidelines

1

$12,760

$12,490

2

$17,240

$16,910

3

$21,720

$21,330

4

$26,200

$25,750

5

$30,680

$30,170

6

$35,160

$34,590

7

$39,640

$39,010

8

$44,120

$43,430

For families/households with more than 8 persons:

Add $4,480 for each additional person

Add $4,420 for each additional person

 

Additional poverty guidelines are available from the HHS Office of The Assistant Secretary for Planning and Evaluation.

The information contained in this article is provided as general guidance and may be affected by changes in law or regulation. This article is not intended to replace or substitute for accounting or other professional advice. Please consult a CBIZ professional. This information is provided as-is with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.

 

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