All three safe harbors represent the maximum an employee can be expected to contribute for self-only coverage. Using the lowest paid hourly workers’ rate, or the state unemployment rate, in the Rate of Pay safe harbor calculation will keep coverage within the affordability criteria of the ACA. The theory here is that no one would be paid under those rates, so you would have a shield from a penalty assessment.

The Rate of Pay safe harbor is actually tied to an individual employee’s hourly or salary wages. It is equal to 130 hours multiplied by the lower of the employee’s hourly rate of pay as of the first day of the coverage period (generally the first day of the plan year) or the employee’s lowest hourly rate of pay during the calendar month.