Federal Revenue and Distributional Impacts of Limiting the Tax Exclusion for Employer-Sponsored Health Insurance Premiums

Federal Revenue and Distributional Impacts of Limiting the Tax Exclusion for Employer-Sponsored Health Insurance Premiums

Policymakers are considering ways to extend the enhancements made to Affordable Care Act premium tax credits that expire at the end of the year, which could cost $350 billion over the next decade. Any expansion of the credits should be offset by reducing other healthcare subsidies or preferences in the tax code, the largest of which is the exclusion for employer-sponsored health insurance (ESI) premiums, estimated to cost more than $5 trillion o…