2027 Marketplace Affordability in California: What the 10.22% Test Means

For 2027, the federal required contribution percentage used in premium tax credit rules is 10.22%. It can matter when a California household compares an employer offer with Covered California and asks whether Marketplace financial help may be available.

Use the number for the right purpose

The 10.22% figure is a Marketplace affordability test in premium tax credit rules. It is not a universal verdict on every employer plan, and it is not a substitute for an employer’s separate Affordable Care Act compliance analysis. Marketplace results can depend on household income, the cost of the relevant offer, who is offered coverage, and other facts.

Practical review steps

1. Collect the employer contribution, coverage tiers, plan year, and coverage notice.
2. Estimate tax-household income carefully.
3. Note whether the question concerns the employee, spouse, children, or another dependent.
4. Use a Covered California application for a current eligibility result.
5. Before dropping coverage, confirm enrollment timing, providers, prescriptions, and possible tax effects.

For employers

The premium-tax-credit percentage is only one part of a larger compliance picture. Applicable large employers may have separate shared-responsibility, reporting, and safe-harbor requirements. Work with a benefits administrator, tax adviser, or counsel for your facts.

Pair this review with our Covered California 2027 checklist, or contact Skyline Benefit.

Sources: IRS Revenue Procedure 2026-26 and IRS guidance. Educational only; not tax, legal, or eligibility advice.

A household example

Consider a worker offered employer coverage while the household is also comparing Covered California. The 10.22% percentage is used in premium-tax-credit rules alongside the household’s expected tax income and the relevant cost of employer-sponsored coverage. The answer may not be the same for the employee and every family member. That is why a household should save the employer coverage notice and complete an accurate Marketplace application rather than rely on a headline or an informal calculator.

Documents that make the comparison easier

• The employer’s coverage offer and the employee contribution for each available tier.
• Expected tax-household income, including known changes in work or family size.
• The people included on the tax return and each person’s coverage offer.
• Preferred doctors, hospitals, prescriptions, and anticipated care needs.

Frequently asked questions

Does 10.22% mean an employer must charge exactly that amount?

No. It is a percentage used in the premium-tax-credit affordability framework. Employer shared-responsibility requirements and safe harbors involve separate rules.

Should I decline employer coverage before applying?

Do not make that decision from this article alone. Compare the actual offer, enrollment deadlines, and a Covered California eligibility determination first.

Can the result change during the year?

Yes. Income, household composition, and an employer coverage offer can change. Update a Marketplace application promptly when facts change.