Opt-out payments offered by employers may be used to determine affordability under the Affordable Care Act, depending on whether they are conditional or unconditional, according to IRS proposed rules.

Under the proposed rules, opt-out payments, cash payments given to employees who opt-out of their employer-sponsored health insurance, will be treated as a salary reduction for the purposes of determining health insurance affordability if they are considered unconditional.

An unconditional opt-out payment refers to an arrangement where the employee declines employer-sponsored health insurance without satisfying any other requirements.

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