Description of Proposed Provision:
F3: Expand covered earnings to include employer and employee premiums for employer-sponsored group health insurance (ESI). Starting in 2022, phase out the OASDI payroll tax exclusion for ESI premiums. Set an exclusion level at the 75th percentile of premium distribution in 2022, with amounts above that subject to the payroll tax. Reduce the exclusion level each year by 10 percent of the 2022 exclusion level until fully eliminated in 2031. Eliminate the excise tax on ESI premiums starting in 2022.

Estimates based on the intermediate assumptions of the 2018 Trustees Report

Summary Measures
Current law
[percent of payroll]		   Change from current law
[percent of payroll]		   Shortfall eliminated
Long-range
actuarial
balance		 Annual
balance in
75th year		   Long-range
actuarial
balance		 Annual
balance in
75th year		   Long-range
actuarial
balance		 Annual
balance in
75th year
-2.84 -4.32   0.92 0.66   32% 15%

graph of OASDI cost rates and income rates by year, under current law and provision. click on graph to view underlying data. graph of OASDI trust fund ratio by year, under current law and provision. click on graph to view underlying data.