What determines whether employer-sponsored health insurance is considered affordable?

Employer-sponsored health insurance is deemed affordable based on a specific percentage of the employee's income that they are required to pay for their share of the premium, particularly for employee-only coverage. Under the Affordable Care Act (ACA), the benchmark often used is that the employee's portion of the premium should not exceed a set percentage of their household income, which is typically around 9.83% for the years 2021 to 2025. This guideline ensures that the cost of obtaining health insurance is manageable for employees and helps to promote access to necessary health services.

The other options do not align with the established criteria for determining affordability as defined by the ACA. For instance, simply measuring the premium for family coverage or setting arbitrary thresholds for total costs or employer contributions does not accurately reflect the affordability standard focused on an individual employee's financial burden related to their insurance premium.